Given the divorce rate in our country today, individuals should consider protecting their rights in the event their marriage comes to an end. Prenuptial and postnuptial agreements are highly effective at accomplishing this goal. As the name indicates, prenuptial agreements are contracted and signed before the marriage, while postnuptial agreements occur during the marriage. Regardless of whether the agreement is signed before or after the marriage, both types specify each party’s rights as they relate to a marital dissolution.
These agreements are often only thought of as a tool for wealthy people or for parties with a substantial difference in earning power. However, in the event of a divorce, recent changes in Georgia law may allow one spouse to claim the other spouse’s separate property (owned by a party prior to the marriage) as marital property if the title to that asset changed during the course of the marriage. This may occur without knowledge or intention on the part of the spouse who originally owned the property. For example, if the husband’s savings account was worth $40,000.00 prior to the marriage, but he transferred the balance into a new joint savings account at the time of the marriage, the wife may be able to claim an equitable portion of the funds in the event the parties get a divorce.
Prenuptial and postnuptial agreements are also useful if both parties have been previously married and there are outstanding child support or other financial obligations to a prior spouse. Additionally, business owners who desire to insulate their company from potential divorce litigation should strongly consider a prenuptial agreement. Small business owners oftentimes find their company’s future tied up in divorce litigation. If you are the sole owner and employee of your business, you may have difficulty “buying out” your spouse’s equitable interest in the company. Moreover, disputes often arise over the value of the business.
Finally, these agreements may be useful if one party anticipates receiving an inheritance, seeks protection from a spouse with tremendous debt or risky investments, or for estate planning purposes.
If you have any questions about how to protect your rights in the event of marital dissolution, please contact our Forsyth County law firm. This information is for general information purposes only.
Source: Pilar J. Prinz, Prenuptial & Postnuptial Agreements, Family Law Institute Program Materials (2012).