Prenuptial and postnuptial agreements are both legally binding and address what happens to assets in a marriage if a couple decides to divorce or if one spouse passes away. Both agreements describe similar scenarios such as alimony payments and asset division. Some agreements also address retirement benefits. If you’re a Michigan resident, here are some important things to know about both of these legal agreements.
The difference between prenups and postnups
The main distinction between these two documents is that a prenuptial agreement is signed before a couple gets married while a postnuptial agreement is signed once the couple is married. However, there are some other differences between the two, including some advantages and drawbacks.
Some of the same topics are covered in both documents since these agreements address how assets, including retirement benefits, are distributed should the couple divorce or if one spouse dies. The documents may also describe alimony and spousal support. Sometimes, the agreements will also provide details for how family heirlooms and other valuable items should be distributed.
The details of a prenup
A prenuptial agreement will likely be more effective than a prenup if one party tries to dispute it after divorce. The courts will presume that coercion is not likely to occur if independent individuals are signing the document before they are legally married and have combined their assets. The document also encourages engaged couples to discuss financial matters in detail before marriage.
The advantages of a postnup
A postnuptial can be used if the couple didn’t sign a prenup but now sees the benefit of this agreement. A postnup can be used as a tool to address major changes in an inheritance that one of the spouses receives or if one spouse now knows more about their spouse’s financial situation. For instance, if one spouse has substantial debt, a postnup can provide financial protection.