28 May Prenuptial Agreements 101
An engagement is an exciting and bliss-filled time in a person’s life. Even more exciting is the wedding that will soon follow. Many couples are so in love that the farthest thing from their mind pre-marriage is the writing of a prenuptial agreement. The idea of a prenuptial agreement can often make people feel uncomfortable, as it brings the possibility of an eventual divorce into their reality. Although it can be uncomfortable to write up a prenuptial agreement, it is ultimately a responsible and worthwhile thing to do.
Why Obtain a Prenup?
The general idea of a prenuptial agreement was once naively associated with marriage schemes where a fiancé is writing up the agreement in order to protect their highly valuable personal assets. However, the usefulness of this legal contract extends far past the exceptionally wealthy. Put simply, it is only rational that any individual that has property, assets or finances that they want to protect in case of a marriage gone wrong should consider drafting up a well thought out prenuptial agreement.
Hire a Family Law Attorney
If you feel that your marriage could benefit from the drafting of a prenup, you must make sure that it is clear, understandable and legally defensible. Although courts have warmed up to the idea of prenuptial agreements in the past 50 years, they will still put the agreement aside if they deem it to be unclear or unlawful. Having each party’s attorneys examine the document can be especially helpful, as you can be more ensured that your agreement will be considered legally sound and fairly negotiated in the unfortunate case that it needs to come into play.
Protect Your Children
One of the most common reasons couples draft prenuptial agreements is to ensure the proper passing of property to children from prior marriages. With this legal document, you can ensure that in the case of your death, the court system will deliver your property to the intended owner. In cases where a prenup is not signed prior to death, there have been instances where the surviving spouse has abused the right to claim a substantial portion (or the full amount) of their deceased spouse’s property, in spite of the deceased’s wishes. This can cause severe harm to the future of the children affected, especially in the case where they are not yet adults. Writing out the specifics of which property, and how much of it, should go to what parties upon your death or separation will help you avoid these potentially catastrophic scenarios.
Outline Rights and Responsibilities
Depending on the financial situation of a couple entering marriage, it may be useful to layout legally binding financial rights and responsibilities. For example, if one spouse expects to stay home and take care of the children while the other provides monetary support, it can be particularly useful to clarify this expectation in a prenuptial agreement. This helps protect that spouse from being left in a dire financial situation if the opposite spouse decides to suddenly divorce them. Too few couples clarify these financial rights and responsibilities in the form of prenuptial agreements, but ultimately it can help protect you in the case that a partner decides to leave you during a time of financial hardship.
Protect Your Spouse from Your Debt
Some spouses may bring in a considerable amount of debt into a marriage. Signing a prenuptial agreement can help you protect your spouse from being affected by any outstanding debts you bring into a marriage during the case of your death. Without a prenup signifying this, creditors may gain the ability to take marital property from you in order to satisfy your deceased spouse’s death. In a time as emotionally challenging as a spouse’s death, you want to make sure you have the maximum amount of protection possible from debt collectors.
Not Just for the Rich
Rich people are not the only ones that hold property and assets that they want to remain in the family. If you hold stocks in a family company, own family heirlooms, or have any other asset that you would not wish to go to your spouse upon separation, you should always clarify that inside of a prenuptial agreement. Additionally, if you know or expect that you will receive an inheritance of similar family property assets in the future, you can include this preemptively within your prenup. This is not an “all or nothing” scenario, so if you want your spouse to gain some of the items that would typically fall under family property, you should clarify this in your agreement.
Divorce Rates are High
Unfortunately, statistics are not completely in favor of the idea of an everlasting marriage. Statistics show that nearly 40% of marriages end in divorce, so prenuptial agreements should be strongly considered. More realistic couples tend to realize this, and will want to sign an agreement that their finances are kept as separate as the law allows. Although most states have laws designating that certain marital or community property must be divided in the case of a divorce, signing a prenup can help you keep all of your individual accumulations you gained during the period of your marriage. For many people, losing their hard earned assets because of an untimely divorce provides a significant, and realistic, fear. Even for couples who are not worried too much about divorce, you can sign a similar prenup that would ensure your individual accumulations go to your children, as opposed to your spouse, in the case of death.
Diminish the Fear of the Unknown
Equitable Division can be one of the more complicated, frustrating and confusing processes that can happen during a divorce. Instead of leaving the rules of this division solely up to the whims of the court, you can establish some base rules for this division preemptively within your prenuptial agreement. Within most states, you can also write up agreements concerning what spouse will be entitled to alimony in the case of divorce. In some cases, you may agree that both spouses will be entitled to alimony.
In addition to preparing your prenuptial agreement, you should always make a detailed and lawfully binding estate plan as well. This will help ensure that all the property you leave behind after a death or divorce goes to the proper inheritors. Estate planning documents include texts such as living trusts and wills. Sitting down with your most trusted lawyers will help ensure that everything is in order when drafting these important documents.
While there are many things you can plan for with a prenuptial agreement, there are some things that do not fall within its legal capabilities. Laws that determine what can and cannot be done with a prenup differ from state to state, so your attorney should be able to help you figure out your local limitations.
Absolutely no state will consider prenup agreements concerning child support, custody, or visitation to be legally binding. State lawmakers consider the welfare of children to be a public policy matter and do not recognize privately made agreements concerning the future of a child. This helps protect children from being forced into homes that are financially unstable, abusive or disadvantageous to the child’s ability to lead a fulfilling existence.
Everyone wants their marriage to stay healthy and strong forever, but this is never an excuse to not be prepared. Knowing what you want to include in a prenup before suggesting one to your spouse can help the process move along in a much smoother manner. Drafting a prenuptial agreement is a responsible decision that helps you and your partner understand the boundaries of your marriage.
If you have any questions about prenuptial agreements, feel free to contact us at +1.786.309.8588.