The idea of a “prenuptial agreement” inherently bothers many people because it can feel like preparing for a marriage to fail before it ever really starts. A prenuptial agreement essentially stipulates each spouse’s rights and obligations in a marriage, particularly when it comes to financial assets. Despite the fact that many people have traditionally found the idea of prenuptial agreements distasteful, the reality is that people with significant financial assets want security in the face of the unknown. It may be a good idea to write up a prenuptial agreement if you and your future spouse both have significant financial assets or one of you owns significantly more than the other.
A prenuptial agreement establishes financial rights and ownership over the property and assets that a marrying couple brings into a marriage. Although it may feel awkward for a marrying couple to start planning for a divorce, the reality is that more than half of marriages in the United States result in divorce. More millennial couples are making prenuptial agreements than previous generations because, today, more people are waiting to marry later than their parents and grandparents.
Having a prenuptial agreement does not mean the couple intends to divorce. It is simply a “just in case” plan in the event the couple does decide to divorce. Instead of dealing with messy and time-consuming litigation to divide all of the couple’s property and assets, the divorcing couple can simply follow the prenuptial agreement and conclude the divorce quickly and simply.
Benefits of a Prenup
Although the idea of discussing what you and your future spouse will do in case of a divorce may sound strange, the reality is that the couple can enjoy peace of mind knowing that they have already covered the financial issues that may come up in a divorce. Married couples need to manage many financial issues together, and a prenuptial agreement can be the bedrock of a healthy and stable financial relationship between spouses.
A prenuptial agreement can also help preserve inheritances, family heirlooms, and family ties. For example, a soon-to-be groom decides to give his new wife his grandmother’s wedding ring that has passed through many generations of the family. If the couple develops a prenuptial agreement, the groom could stipulate that the wedding band returns to him in the event of a divorce. Without a prenuptial agreement, it’s possible that a judge could rule that the wedding band was a gift to the wife and is therefore her property. If there is any bad blood between the divorcing spouses, he may never see the ring again and lose a precious family heirloom.
Prenuptial agreements can also protect children from previous marriages. A parent can include specific protections that prevent the other spouse from taking property or money that essentially belongs to the parent’s children. A prenuptial agreement can also clearly lay out financial expectations before the wedding day so both spouses know exactly what to expect after marriage in terms of finances and personal property rights. Additionally, a prenuptial agreement is able to protect one spouse from the other’s previously accumulated debts and financial obligations.
What is quite possibly the biggest benefit of a prenuptial agreement is that if a divorce does happen it will proceed much more quickly than it would without a prenuptial agreement. Without such an agreement, a divorce can take months or even years to resolve, costing both parties significant legal fees and stress.
Potential Drawbacks and Disadvantages of Prenuptial Agreements
Despite the fact that a prenuptial agreement can be a great way to establish peace of mind and expectations before a marriage, it is still possible for a spouse to take grave offense at the suggestion of a prenuptial agreement. Many people unfortunately automatically assume that the suggestion of a prenuptial agreement indicates a lack of faith that the marriage will work.
Suggesting a prenuptial agreement isn’t exactly a romantic notion and may cause serious problems in the relationship. It’s also possible for one spouse to take such extreme offense that he or she calls off the marriage or ends the relationship entirely. If a person views a prenuptial agreement as planning the divorce before the wedding it can result in serious problems for the couple.
Another area of concern is potential interference with a prenuptial agreement. If one spouse hides assets from the other, coerces an agreement or forces the other spouse to agree to the prenuptial agreement under duress, the offending spouse could face significant legal penalties in addition to criminal fraud charges. Each spouse should have his or her own attorney for handling the prenuptial agreement to ensure things like this do not happen.
Changing or Altering a Prenuptial Agreement
Another benefit to prenuptial agreements is that they are essentially future-proof in several ways. They not only stipulate what each spouse’s financial rights and obligations are during and after the marriage, but the couple can also amend or alter their prenuptial agreement after marriage to account for changing circumstances.
For example, one spouse receives a major promotion that entails stock options. The couple’s prenuptial agreement never referenced anything about stock options because neither spouse owned any when they drew up the original agreement. After the promotion, the spouses and their attorneys can meet to amend the prenuptial agreement to account for this new development.
It’s also possible for certain life events to void a prenuptial agreement, such as the birth of children. In such an event, the couple can alter the effective dates of the prenuptial agreement and include new clauses that pertain to the couple’s children or other relevant changes.
How Can an Attorney Help?
Although a couple investigating a prenuptial agreement is going to marry, they are still drawing up an agreement that protects each of them individually. This means each spouse needs his or her own attorney to ensure the prenuptial agreement is as fair as possible to both parties. If there is any concern over elements of a prenuptial agreement, an experienced family law attorney is one of the best possible resources. Attorneys will also ensure that both spouses accurately disclose their required financial documents and proof of assets.
Ultimately, a prenuptial agreement is only advisable for couples who enter a marriage with significant financial assets, or in a marriage in which one has significantly more financial assets than the other. Such an agreement also enforces transparency between marrying spouses and can help build a foundation of trust in a new marriage.