Prenup vs. Postnup: What's the Difference?

Prenuptial and postnuptial agreement contracts outline the handling of marital assets in cases of divorce or death. Both agreements cover similar topics. These include the division of financial assets, alimony provisions and, in some cases, retirement benefits such as pensions. The key distinction between the two is timing. You sign a prenuptial agreement, or “prenup,” before marriage but sign a postnuptial agreement, or “postnup,” after. When considering a prenup vs. postnup, each type has unique pros and cons. Couples should review the differences to determine which best suits their needs.

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Prenup vs. Postnup Basics

The same sorts of topics often appear in both prenups and postnups. They commonly detail how to distribute financial assets like retirement benefits and other investments. They may also prescribe levels of spousal support and alimony. Sometimes heirlooms and other sentimental items will remain with one family in the event of a divorce or death.

Negotiating a prenup or postnup involves some challenging conversations. You can save some money by settling the main issues outside an actual attorney’s office. Some couples even use a professional mediator to ease decisions on the terms of a prenup or postnup.

Prenup Pros and Cons

When it comes to disputes, a prenup is more enforceable than a postnup. However, enforceability depends on state law and the circumstances surrounding the agreement. Courts may examine whether each person entered the agreement voluntarily, disclosed relevant financial information and complied with applicable legal requirements.

A prenup also forces couples to discuss sensitive financial matters before tying the knot. That can limit later misunderstandings. It can also relieve anxieties about someone entering into marriage just for the money.

Prenups can also help provide for children from a previous marriage. And because often settles matters that come up in a divorce, it can save money on divorce attorney fees.

Despite these advantages, asking a prospective partner to sign a prenup can be a challenge. Some see it as a sign that their partner doubts their commitment to the marriage. Some may see the mere discussion of legal and financial matters as unacceptably unromantic during wedding plans. And in many cases, raising the issue is likely to prompt some difficult discussions.

Another problem with prenups, which is one of several key issues to consider before marriage, is that they are sometimes hard to enforce. In part, this is due to frequent changes in statutes and case law regarding validity of prenups. After the trouble and expense of getting a prenup signed by both parties, in the end it may not be upheld as valid.

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Postnup Pros and Cons

A couple fight over money during a divorce.

A key advantage of a postnup is its flexibility for couples who didn’t establish a prenuptial agreement, but later find it beneficial. Postnups can address concerns that arise from significant changes, such as an inheritance received by one partner, or if new financial information comes to light, like discovering one partner carries substantial debt.

A postnup can also serve as a commitment tool when one spouse shows signs of dissatisfaction, helping to reinforce stability in the marriage. Conversely, if a couple is considering divorce, a postnup can help ease potential conflicts, making it easier to navigate the terms of separation if it becomes necessary.

However, postnups come with potential challenges. Courts may scrutinize agreements made during marriage for undue pressure, unfairness or inadequate financial disclosure. The legal standards vary by state, and some states impose stricter requirements on postnups than prenups.

Additionally, similar to prenups, introducing a postnup can sometimes signal concerns about the relationship’s stability. The suggestion of a postnup may appear like a sign of possible marital strain.

How to Decide Whether a Prenup or Postnup Makes Sense

Are you already married? If you are planning a wedding, a prenup gives you the opportunity to establish financial terms before the marriage begins. If you are already married, a postnup may provide a way to address financial concerns that have developed since the wedding.

Consider a couple planning to marry when one partner owns a business valued at $400,000. They may want an agreement specifying whether the business, its future appreciation and any income it produces will act as separate or marital property if they divorce. A prenup can address those questions before the marriage.

Now suppose the couple marries without an agreement, and five years later the business is worth $700,000. They may consider a postnup to establish how to treat the business if the marriage ends. However, they cannot assume that signing an agreement will automatically make the entire $700,000 separate property. The outcome depends on state law, the source of the business’s growth, and whether the agreement is legally enforceable.

In either situation, each person should consider obtaining independent legal advice before signing. An attorney familiar with the applicable state’s family law can explain what the agreement may cover and which provisions a court is likely to enforce.

Bottom Line

The biggest difference between a prenup vs. postnup is the timing.

Both prenups and postnups aim to settle financial and other terms of a divorce or death of a married partner in advance. The main difference involves timing – prenups happen before marriage and postnups happen after. While enforceability depends on state law and the terms of each agreement, a postnup may be an option for couples who are already married and want to establish financial arrangements.

Financial Planning Tips

Before signing or attempting to negotiate a prenup or postnup, consider talking it over with an experienced financial advisor. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Marriage and divorce both affect your income taxes. SmartAsset’s income tax calculator can help you understand ahead of time how your tax burden will change after you tie the knot. The effect on taxes from a divorce are also important to understand.