A prenuptial agreement is a written contract between two people before marriage. It sets out the terms of possession of assets, treatment of future earnings, control of property, and potential division of wealth, property, and assets if the marriage is later dissolved. In sum, it states how money will be distributed in case of divorce, separation, or death. Postnuptial agreements are similar, but they are entered into after marriage.
Because 50% of marriages end in divorce, getting a prenuptial agreement is smart financial planning. It can both give a wealthier spouse reassurance about protecting his or her own assets in the event of divorce and guarantee some entitlement to property distribution for a less wealthy spouse. Without a prenuptial agreement, in the event of death or divorce, the state will be responsible for distributing a couple's assets if they disagree about how to split them. This may not result in an outcome that you are pleased with.
#2: What Can a Prenup do for You?
Having a prenup can save substantial time, energy, and money by eliminating the need to dispute the division of wealth in court in case of divorce. But in addition to defining who gets what in a divorce, prenuptial agreements can also be used to gain several other, less-known benefits, including:
1. Prenups can define who is responsible for different financial duties in a marriage and how these matters will be carried out.
2. If you or your future spouse has significant debt, getting a prenup can keep you from having to take on the other's debt yourself.
3. Prenuptial agreements are also used to keep finances separate, rather than as a part of marital or community property, which consists of assets accumulated during marriage.
4. Prenups can be used to determine who will inherit your property, assets, and money.
5. A prenup can stipulate what will be done with money you or your spouse inherit.
#3: Who Should Get a Prenup?
Getting a prenup is sound financial planning for anyone. But certain groups can particularly benefit from this protective measure. You should especially consider a prenup if:
1. You have substantial assets, such as property, stock or retirement funds.
2. There is a large disparity in assets between you and your spouse.
3. You expect to be inheriting money in the future.
4. You have children from a prior marriage, whom you would like to ensure inherit their fair share of your assets.
5. You anticipate a large income increase, such as if you predict your business taking off or if you are pursuing a degree in a profitable career.
6. You have loved ones who you hope to take care of financially, such as elderly parents, who you would like to receive a portion of your income or assets.
7. You are a same-sex couple. Because same-sex marriages are not recognized nationally, issues can arise if the couple moves to a state that does not acknowledge their marriage.
#4: What Should be Covered in a Prenup?
While prenups vary based on the specific situation of each couple, there are common areas that should be covered. Generally, prenups should:
1. Define what will be considered separate property, meaning it will belong only to one spouse. This often includes assets acquired before the marriage, inheritance, or personal objects.
2. Specify the couple's preferences for spousal support and maintenance. Spousal support is a legal obligation on one spouse to provide financial support to the other if separation or divorce occurs.
3. Determine how joint-property, such as residences bought together, will be divided in case of separation or divorce.
4. State where joint-property will go upon the death of either party during the marriage.
5. Define how child support will be determined, if the couple has children together after marriage, such as whether it will be decided by a court or otherwise.
#5: How to Get a Prenup
If you feel that a prenup is right for you, the first step you should take is talking to your future spouse about it. The prenup can protect both of your interests, so it is important to convey how getting one will be mutually beneficial.
Once you and your future spouse decide to get a prenup, the next step is for each of you to find an attorney. Although technically couples can draft their own prenup, most choose to have a lawyer draft it because a court can invalidate those that are not drafted properly.
Couples can meet with one lawyer together, but it is preferable for each party to pursue his or her own counsel in order to ensure that each person's interests are safeguarded. Courts are also often hesitant to enforce a prenup signed by someone who did not have independent legal representation.
When looking for lawyer, you should seek out an attorney who specializes in family and nmatrimonial law and has extensive experience drafting prenups.
As you can see, getting a prenuptial agreement can greatly benefit most couples who plan to get married. Despite their reputation for causing conflict in relationships, prenups actually can protect both parties' financial interests and help couples come to terms with each other on many important issues. They provide a way to tailor divorce and matrimonial law to each couple's needs and help prepare people for unpredictable future circumstances, such as separation, divorce, or death.
Additional resources provided by the author
For more information on this topic, send a contact form on Brian D. Perskin & Associates P.C.'s web site, www.newyorkdivorceattorney.com, to request Attorney Perskin's E-Book on prenuptial agreements.