SHOULD I CONSIDER A PRENUPTIAL AGREEMENT BEFORE MARRYING?
Although it may not be the most pleasant subject to address before (or after) asking one to marry you, in appropriate cases it may well be critical that you at least consider doing so. This is especially true when the two parties have no financial parity. A prenuptial agreement should also be considered when the forthcoming union is between older individuals, who may have children and significant assets from prior marriages and who may well desire to segregate pre-existing property or assets and retain these as separate property, not subject to equitable distribution in the unfortunate event of a future divorce.
If the marriage will ultimately fail, a prenup will greatly facilitate and expedite future divorce proceedings, saving both parties significant amounts of money and stress.
Depending on the facts of the particular financial circumstances of both parties, some prenuptial agreements may address in great detail the future financial arrangements to be followed during the couple’s married life together. For example, you can address in the agreement who will make the mortgage payments, rent payments and other major expenses of the marriage, who will work, how income will be divided, what will constitute marital funds, and what will remain separate property. The agreement will also address in detail what will happen in the unfortunate case of a future divorce from the financial perspective: how property will be distributed (and as importantly, not distributed), what property will be considered separate, as well as whether, in what amount and for how long spousal support (maintenance or alimony) will be paid by either the husband or the wife to the other.
Prenuptial agreements are particularly useful and recommended, in the following more specific circumstances:
- When either of the prospective spouses have children from a previous marriage;
- Either of the prospective spouses already owns a business;
- Either of the prospective spouses has significant assets that he or she wants to retain as separate property;
- One of the future spouses has large debts;
- Either of the prospective spouses now has, or is soon expected to have much higher income than the other.
If you have decided that you or your future spouse’s financial circumstances require a prenuptial agreement, all precautions should be taken to ensure that the document which will control your future financial lives will be drafted properly so that it will be enforceable in a court of law, if need be. In this regard, depending on the jurisdiction where the agreement is made (and/or in the jurisdiction in which it is expected to ever be enforced), the document may well have to comply with many elements, among which are the following:
- The agreement must be in writing and signed before the marriage;
- The agreement must be signed before a notary public;
- None of the parties should be required to sign the agreement in haste;
- The agreement should be fair and reasonable in all respects and based on full financial disclosure by both parties of all their assets and liabilities.
- Each side should have his/her own attorney to prepare, negotiate or correct the document and to respond to all of the client’s questions before the document is signed.
Statistically, more than half of all marriages end in divorce. This cold fact alone suggests that a prenuptial agreement should be regarded as a very practical thing. In fact, notwithstanding conventional belief that romance and financial planning do not mix, an early, candid communication with your spouse to be may well be the best way to start a new relationship.
Many agreements provide for termination after a number of years (presumably when the marriage has been thoroughly tested and determined to endure), or upon a stated event, such as the birth of a child.
The bottom line is that given the realities of divorce litigation and the applicability of alimony and equitable distribution laws, in the absence of a solid pre-nuptial agreement, in case of divorce future spouses may well risk losing all or a part of their pre-existing property and assets, as well as future income.
Author: Rober S. Popescu, Esq.
This and all other articles published by the firm do not constitute legal advice upon which the reader should rely. The matters addressed are general and informational only. Legal advice may only be offered to an actual client of the firm, following consultation and analysis of his/her specific circumstances. The laws vary significantly from jurisdiction to jurisdiction and some or all of the concepts addressed above may have no relevance or applicability in your state. A lawyer-client relationship may only be formed by formal consultation and engagement of the firm.