If you are planning to get married, you or your partner may very well be thinking about a Prenuptial Agreement. These contracts have gained popularity in recent years, thanks in part to later-in-life marriages, relaxed stances on divorce, and the fact that many people are entering marriages with their own assets and debt.
As such, a Prenuptial Agreement may be something you have been considering. If you are unsure if you should have a Prenuptial Agreement, consider the following points.
1. Prenuptial Agreements are not just for the wealthy
People often assume a Prenuptial Agreement is only necessary if you have significant assets. While it may be true that those with significant assets to protect turn to Prenuptial Agreements to ensure their assets remain protected, those with more modest assets can, and do, take advantage of Prenuptial Agreements. For instance, a Prenuptial Agreement can carve out certain assets that you wish to pass on to your children, and can establish, in writing, a list of assets that you owned prior to your marriage and wish to retain as your own in the event your marriage ends.
2. Not all Prenuptial Agreements are valid
Having signed a Prenuptial Agreement does not necessary mean that a court will uphold or enforce it at the time of a divorce. If the marriage ends in divorce, one or both spouses may ask the court to enforce the terms of the Prenuptial Agreement. In order for the court to enforce the Prenuptial Agreement, the court will need to ensure, among other things, that the contract is valid. One example of a reason for which a court may not enforce a Prenuptial Agreement is a failure to disclose financial information at the time the Prenuptial Agreement was signed. Another example is if one party was coerced into signing the Prenuptial Agreement, or did not have a meaningful opportunity to have an independent attorney give advice about the legal effects of the Prenuptial Agreement.
Because of this, it can be crucial for both parties to have legal representation when drafting and signing a Prenuptial Agreement. It can also be crucial for the Prenuptial Agreement to be completed and signed well in advance of the wedding, so that neither spouse is feeling coerced or compelled to sign it.
3. You should not rush through the process
It is important that these discussions begin early, and that neither spouse feels rushed through the process of discussing or signing a Prenuptial Agreement. In fact, rushing through the process could ultimately cause one spouse to later argue that the Prenuptial Agreement should be invalidated.
Take your time with discussions and be honest. Think about what you both want to protect. Review proposed terms with an attorney and negotiate any conditions with which you disagree. By taking your time and being careful, you can create an agreement that fits your needs and gives you peace of mind.
4. You may never need it
Having a Prenuptial Agreement is, of course, not an indication that you have cold feet or that you expect your marriage to end in divorce. Perfectly happy couples opt to have a Prenuptial Agreement as they prepare for their weddings. In fact, many of these happy couples believe that a well thought out Prenuptial Agreement will help to ensure that they have a happy marriage. This is because the preparation of a Prenuptial Agreement forces both spouses to have a discussion about finances – what each spouse’s financial situation is as they prepare to be married, and also how the finances will be handled during the marriage. For example, spouses discuss where they will deposit their incomes, whether they will have joint accounts, and how they plan to save for retirement.
If all goes well as planned, you may never need to enforce your Prenuptial Agreement. You may store it in a safe place in your home where it will collect dust for many years.
Prenuptial Agreements can be a difficult topic to process and to discuss with your soon-to-be spouse. Having this conversation early is important. If you are on the fence about whether a Prenuptial Agreement would be appropriate for your situation, talk with an experienced family law attorney about your options.