I am often asked by clients whether they should get a prenuptial agreement or not. Some of my clients only come to see me because their parents are “making” them get a prenuptial agreement in order to secure some future inheritance or perhaps shares in the family business. Others have been asked to sign a prenup and they aren’t sure they should. Whatever your situation, here are some questions you should be asking before deciding whether to enter a prenuptial agreement before you say “I do.”
Do I need to get a prenuptial agreement before I actually get married, or can I get one after we are married? Believe it or not, I do get asked this question from time to time. The name itself answers this question: pre (BEFORE) nuptial (MARRIAGE). So yes, you must enter this agreement with your betrothed before you are legally married. If you don’t, then you are looking at a post-nuptial agreement which is an entirely different legal animal and we will leave that topic for another day.
Are prenuptial agreements valid? The lawyer’s answer is, it depends. You want to make sure you have an attorney advising you, that you both fully disclose your assets and debts to each other, and you want to make sure you have plenty of time to consider, negotiate and enter the agreement…ahead of your wedding day. These are typical challenges to whether a court will uphold your agreement. You don’t want to take these chances and will want to meet with an attorney to make sure you have these challenges covered. The last thing you want to see is the judge legally throwing out your prenup in the middle of a future divorce proceeding.
Why do I need a prenuptial agreement? Prenuptial agreements are often used by clients who have amassed wealth that they do not necessarily want to share with a potential ex-spouse in a future divorce, or that they want to protect for their children from a prior relationship in the event of their death, or divorce. Some clients may own a family business and want to make sure the business stays within the family and not with a future divorced in-law. If you are self-employed and want to avoid sharing all of your blood, sweat and tears in building your business in a future divorce, then you should consider a prenup. If you want to protect your income from a large spousal support obligation, a prenuptial agreement can do that, or if you stand to inherit any wealth and want to make it clear from the beginning that any inheritance you may receive remains your separate property after you are married.
Have you and your betrothed had “the talk?” Better put, do you know anything about your soon to be spouse’s finances? Are they employed? Do they have savings? How much debt are they carrying on their credit cards? Are they still on the mortgage with their former spouse? Are you moving in with your spouse or are they moving into your house? Are you putting them on the deed? Should you put them on the deed? How do you plan to handle your joint expenses? Are you expected to contribute or are you going to support your beloved? If you have assets of any significance and you don’t want to take the risk of having to share half of those in a divorce, then you absolutely should be talking to an attorney to decide whether to get a prenuptial agreement.
How Will a Prenup Keep Me Happily Married? You hoped I would get here. Here is my answer: no one should enter a marriage without having “the talk” ahead of marriage. Don’t make assumptions about financial issues because, in my experience, financial issues are what cause most marriages to break down. If you determine you need a prenup, then the process of negotiating the prenup will answer most of these questions. Once we have gone through the process, clients are relieved to know they have protected what they have built, they have control over their wealth, they can acquire joint property with their spouse without fear of losing their separate property, they can share their wealth by gifting without risking their estate planning, and they can provide for their heirs while also providing for their spouse if they want. And if you are the spouse with the smaller estate, you can negotiate provisions that allow you to be provided for in the (hopefully) unlikely event of a divorce or the untimely death of your spouse. So starting a marriage with all of this worked out ahead of time does allow the parties to focus on the happy aspects of marriage like love and family, which should help you to stay happily married ‘til death do you part.