It seems obvious that a pre-marital agreement must be entered before marriage, right? Well, have you ever heard of a post-marital agreement? They exist, and the only difference between them is whether you sign one before or after you are married. Which is why we prefer to call these agreements “Marital Property Agreements.” Marital Property Agreements can be done before or after marriage.
Why would a happily married couple do a Marital Property Agreement? Often, couples maintained separate assets that they brought into the marriage, or obtained separate assets, such as an inheritance. If the spouses have different goals for their assets, meaning different beneficiaries because one or more spouses has non-joint children or different charitable goals, it is important to define which assets are whose.
A goal of good estate planning is to have clarity to avoid future disputes. A potential dispute is that different beneficiaries claim assets are community property or separate property. Without good proof, separate property can be easily treated as community property, defeating the goal of the different estate plans. Therefore, it is perfectly rational and valid for happily married couples to enter into a marital property agreement to define the community and separate nature of their various properties.
Many people think of these agreements exclusively as “pre-marital agreements” because they only contemplate that such agreements are to protect from the possibility of divorce. As estate planners, we know this reality: All marriages end. They end, unfortunately, in divorce sometimes, but they always end with the death of one spouse.
So remember: Marital property agreements are for happy couples, too.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
