The future financial relationship between couples aiming to tie the knot can be tricky. Even when the two people start out married life more or less equal in assets, income and prospects, things can change over the period of married life. The arrival of children, changes in employment and career, inheritance and illness can all significantly alter the financial relationship between the two partners. Some couples aim to start off married life with very different financial assets and there may be many reasons why they decide to make an agreement setting out what will happen to those assets if the marriage ends, either through divorce or through death.
When a couple decides to make a financial agreement between them, either before or after marriage, it can have a number of advantages, as well as some disadvantages. The disadvantages are not always anticipated in advance. Prenuptial and postnuptial agreements, often abbreviated as ‘prenups’ and ‘postnups,’ need to be well thought out and state laws followed if they are going to be both useful and enforceable if there is a dispute between the spouses later in the relationship. Massachusetts courts, in particular, may decide that a prenup or postnup is not valid, simply because it wasn’t properly thought out, or that it was derived through coercion or left one of the spouses in serious hardship if enforced. It goes without saying that an experienced attorney should be used to hammer out a fair, workable and enforceable prenuptial or postnuptial agreement.
Prenups and postnups: what’s the difference?
The main difference between prenups and postnups is the timing. Prenuptial agreements are made before marriage, while postnuptial agreements are made after marriage. One might ask whether these sorts of agreements can be made if a couple decides not to get married and decide simply to live together or cohabit. Trends across the western world, including in Massachusetts, show that an increasing number of couples choose to cohabit and this trend is even more common if it is a second or third relationship. The answer is that prenups and postnups can be made by cohabiting couples for all the same reasons as for married couples, although the term ‘cohabitation agreement’ is the preferred term rather than ‘pre or postnuptial,’ simply because ‘nuptials’ is the old term for marriage!
Why do couples opt for a postnuptial agreement instead of a prenuptial agreement? There are many reasons for this. It may simply be that any kind of financial agreement may never have been contemplated in the heady heat of a developing romance. As explored further below, one of the disadvantages of a prenup is that it introduces an element of coldhearted calculation into a relationship that might actually put a couple off getting married. Once married, with all the possible changes that might develop, could engender a more rational appraisal of who should have what if the marriage dissolves. In particular, who should look after any children that the couple has, what alimony should be paid, who should have the family home, etc., all decisions that might never have been anticipated before marriage.
What are the pros and cons of each type of agreement?
The main advantage of a prenuptial agreement is that it sets out financial arrangements when there are significant differences in assets between the two would-be spouses. An agreement that is well thought out and adheres to state law may avoid arguments and disputes in the event that the marriage ends prematurely. Prenups are often in the news when celebrities or the very rich decide to get married. These marriages are most likely to be between two people who have widely different asset portfolios and/or incomes. Marriages in the twenty first century are more likely to end sooner rather than later than was the case in the last century and it is far less socially unacceptable to divorce these days, so a prenup may be seen as just being cautious.
The main advantage of a postnuptial agreement is that it can be made when significant financial differences start to appear after marriage. One or the other partner may gain a significant inheritance; decisions about the care of children may need to be made; one spouse or the other may have been promoted through their own efforts and have a significantly higher income which they hadn’t before marriage. And then there is the possibility that the initial gloss of marriage has started to wear off and there is a very real possibility somewhere down the track that there could be a divorce. A postnuptial agreement could stave off arguments about money and help to preserve the relationship or at least satisfy the concerns of the least well endowed of the two spouses.
The main disadvantage of a postnup compared to a prenup is that although either agreement should be well thought out, postnups tend to be less easily enforceable in a court compared to prenups.
Massachusetts perspectives: how enforceable are prenups and postnups?
When one or another in a marriage disputes a prenuptial or postnuptial agreement, it often ends up in court. Massachusetts courts may decide that the terms of one of these types of agreements are not enforceable. This is most often when one or more of the following is a characteristic of the agreement being disputed:
- The agreement was never written down, but simply an oral agreement.
- The agreement was never signed by both partners and formally notarized.
- The couple made the agreement without using an attorney(s). Although the use of an attorney is not strictly necessary under Massachusetts law, it is highly recommended and a court may have a careful ‘second look’ at an agreement made without legal advice.
- The agreement can be shown to have been made without full and equal acceptance by both partners. Any element of coercion when the agreement was first formulated is likely to see the agreement being rejected by a Massachusetts court.
- The agreement is going to leave one of the spouses seriously disadvantaged, homeless or left without enough income for a reasonable existence.
- The agreement was made without both parties being totally open and honest about the assets and income they had at the time.
Get an appointment with The Law Offices Of Richard Mucci to work with an experienced attorney who can help you with either agreement.