You can enter into several contracts before, during, and after marriage.

In general, these belong to three categories:

  • Premarital agreements (aka prenuptial agreements), which are entered into before marriage
  • Marital agreements (i.e., postnuptial agreement or transmutation agreement), which are entered into during marriage
  • Separation agreements, which are entered into when the marriage ends

Let’s explore the key differences.

Prenuptial Agreement

As the name suggests, couples sign prenuptial agreements before tying the knot.

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A prenuptial agreement is a legally binding contract determining important marital guidelines such as how to split finances, guidelines around spousal support, and who is responsible for which debts.

Contrary to popular belief, prenups are valuable for everyone – not just the wealthy – and may be applied during your marriage and in the event of divorce or death.

Why Get A Prenup?

The value of a prenup is twofold.

First, it saves time and money. Rather than enduring painstaking and sometimes brutal back-and-forth arguments over assets in a divorce, you can simply reference your prenup, where all these details are predetermined.

More than that, a prenuptial agreement is a tool for financial planning with your soon-to-be spouse.

Like it or not, finances play a huge role in marriage. You’re better off clearing the air early than winging it as you go.

At its core, a prenup encourages marital success by forcing important conversations about your hopes, dreams, and goals for the future as a couple.

Postnuptial Agreement

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A postnuptial agreement is a marital contract entered into during marriage.

It operates similarly to a prenuptial agreement and is used by married couples to either redefine the financial laws of their marriage, agree on the characterization of a specific asset, or generally determine how assets and debts are split if they divorce.

However, the laws of enforcement regarding postnuptial agreements are very different than a prenuptial agreement and should be drafted by an attorney.

Why Get A Postnup?

Some people simply missed the boat on their prenup and wish to get their finances in order post-wedding.

In other cases, people discover their spouse has concerning spending habits and want to safeguard their finances.

Or it may be that a spouse has inherited a property and they want to make sure it remains their separate property.

Whatever it may be, a postnuptial agreement is a solution for those who missed out on the prenup but still want to draw clear boundaries around their assets and debts during marriage.

Transmutation Agreement

A transmutation agreement is a postnuptial agreement that effectively shifts how you characterize your property.

Use a transmutation agreement to transfer ownership of an asset from separate property to community property, community property to separate property, or from one person’s separate property to the other’s separate property.

Why Get A Transmutation Agreement?

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Separate property is owned just by you, while community property is an asset acquired during marriage, and therefore, jointly owned by you and your spouse (regardless of how title is held).

In community property states like California, any property acquired during marriage is owned 50/50 between you and your spouse (unless you designate otherwise in a prenup).

The “what’s yours is mine” mentality is nice but can also be contentious during divorce, especially if each spouse feels entitled to certain items.

If you don’t have a prenup or postnup, you can remedy this by transmuting property during the marriage. Maybe you want to keep specific property separate so you can pass it down to your children from a different marriage. Conversely, you might like to gift an asset to your spouse and transmute it to your community property.

Either way, a transmutation agreement is an excellent option for couples looking to shuffle their property around in lieu of a prenup or postnup.

Separation Agreement

Separation agreements are contracts created when a couple decides to separate but not divorce. They outline how assets, child custody, and other responsibilities will be handled during the separation period.

Why Get A Separation Agreement?

Even though a separation agreement may not be legally enforceable, it can be a lifeline for couples navigating the choppy waters of a potential divorce.

Think of it as a structured pause button, allowing partners to take a breath and assess their future without the immediate finality of divorce.

It’s like setting clear ground rules during a time-out, ensuring both parties understand and agree on crucial aspects like finances, child custody, and everyday responsibilities.

Final Thoughts On Marriage Contracts

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Marriage contracts help you set parameters around your marriage and finances before, during, or after the marriage. When written effectively and with care, they bring clarity and peace to your life.

I live and breathe prenuptial and postnuptial agreements and firmly believe in their value to relationships at all stages. Feel free to book a consultation call with me to start crafting custom marriage contracts that set you up for long-term marital success.

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