An agreement that is entered into prior to the marriage is called a “Prenuptial” or “Premarital” agreement. A Premarital agreement takes effect on the date the parties are married and is usually designed to limit the accumulation of community assets and debts.
An agreement entered into during the marriage is a Marital Property Agreement and is sometimes known as a “Partition” or “Postnuptial” agreement. Very similar to a Premarital agreement, the parties to a Marital Property Agreement often agree to convert community property into the separate property of the parties, thereby “partitioning” the community property between the spouses.
The primary purpose of most marital agreements is to give current or prospective spouses the ability to alter their marital-property rights without judicial action. Marital agreements also have an important secondary purpose: they permit current or prospective spouses to more specifically define their rights and obligations toward each other.
Common Reasons for Marital Agreements
- To preserve family fortunes for children from an earlier marriage.
- To eliminate, limit, or set any future alimony/spousal support obligations.
- To predetermine the parties’ rights and duties during marriage, including child care, housework, career sacrifices, and managerial responsibilities related to family finances.
- To detail what property belongs to each party upon entering the marriage and who will have management rights over that property.
- To ensure a certain religious upbringing of a child, especially if the marriage is later dissolved (limited).
- To keep one spouse’s income separate to pay off premarital debts or to meet spousal-maintenance obligations associated with an earlier marriage.
- To clarify how taxes will be filed and who will be responsible for income-tax liability.
- To provide for the disposition of the parties’ property upon divorce.
- To provide for the disposition of property upon the death of one spouse (the agreement could supersede or eliminate the need for a will that covers the concerned property).
Of course, the most commonly-known reason for a marital agreement is to pre-determine the disposition of property should the relationship end. At any point before or during the marriage, spouses may enter into a signed, written agreement regarding whether certain assets or debts are to be categorized as community or separate and how property would be divided in the event of a divorce. These agreements usually overcome how a judge may customarily divide property if no agreement was in place. Only if a divorce were to occur would these agreements come in to play.
Even if you own nothing now, a property agreement can still be very helpful should the unthinkable happen. Attorney Vince Handler will help you evaluate the best course of action for you. Contact us today.