A prenuptial agreement is a written contract that two people enter into before they get married. Other legal terms for the same contract include antenuptial or premarital agreement.
Couples use these contracts to define each person’s property rights if they decide to get divorced and dissolve their marriage. It may also address how their debts are to be divided. A postnuptial agreement is essentially the same type of contract, but it is concluded after a couple ties the knot.
Although most people assume that these documents are only for the rich, they can also serve very practical purposes for couples of average means. Here is a short guide to how a prenuptial agreement can be useful, as well as what the disadvantages of them are.
What Are Some Common Issues that Prenuptial Agreements Address?
Prenuptial agreements are often used when the spouses acquire significant separate property before marriage. The spouse with substantial assets before the marriage may want to protect their separate status in case of divorce. That can be one strong argument for a couple having a prenuptial agreement, but it is not the only reason. Prenuptials are now a valuable tool for those entering into second marriages and those starting families where spouses bring children from prior relationships.
An engaged couple with children from prior marriages or relationships can use a prenuptial to determine what should happen to some of their property when they die. This way, they can pass on separate property to their children and provide for their spouse. Without a prenuptial or a proper estate plan, the laws of intestacy might give a surviving spouse the legal right to claim a much larger portion of their spouse’s property, whether or not that was the desired result.
In fact, for this reason, it would be a good idea to create an estate plan with a will if the marriage is second or subsequent. The estate plan could confirm the provisions of the prenuptial agreement and ensure that when one spouse dies, their assets are distributed according to their wishes.
Some couples use prenups to avoid significant legal entanglements if a divorce happens. If they can spell out what property is going to which spouse and what debts and other financial obligations, such as alimony, they can make a stressful event like marriage dissolution a little bit easier.
However, certain issues cannot be determined in a prenup, such as child support or custody arrangements and spousal duties or daily chores. A person would want to consult an experienced family law attorney to clarify what can and cannot be put in a prenup in their state.
What Are the Benefits of a Prenuptial Agreement?
Although talking about prenuptial agreements may be awkward for a couple, there is a reason that they exist: to help legally protect each spouse if something goes wrong and the marriage ends. The most obvious benefit of a prenuptial is asset protection.
A prenuptial agreement is especially useful when one spouse wants to protect their separate assets from being the source of funds to pay off the other spouse’s debt, such as student loans or credit card debt. If a person is entering into a marriage with someone with significant debt, they may want to ensure that their separate assets are not used to pay off the spouse’s debt.
Another situation that calls for a prenuptial agreement is that one spouse owns a business. A prenuptial agreement can ensure that the business continues to be the property of one spouse and is kept separate from marital assets.
A prenuptial agreement can also establish how responsibility for debts is divided between the spouses and help protect each other from issues with creditors. And because a prenuptial agreement is a contract, it can be tailored to each couple’s specific and unique situation. Spouses can include provisions tailored to their relationship and legal and financial situations.
Of course, a couple can help themselves by ensuring they act according to the prenuptial agreement during the marriage. So, for example, one spouse may enter a marriage with a business, maybe a family business, that the couple wants to maintain as the separate property of the spouse who owned it before the marriage.
It would help them if the prenuptial agreement must be enforced in a divorce proceeding if they act in a way that is consistent with the separate character of the business during the marriage.
What Are the Disadvantages of a Prenuptial Agreement?
While there are many pros to having a prenuptial agreement, there are also drawbacks. From an emotional standpoint, couples may feel that approaching the idea of a prenuptial means there are trust issues between them or that they expect to have trust issues in the future. So, bringing up the issue of a prenuptial can be awkward.
On the other hand, negotiating a prenuptial agreement allows prospective spouses to discuss how they expect their finances to be managed during the marriage. This may prove to be informative. They may discover that a prenuptial could be useful for their situation. Or they may find that they do not need one and prefer a traditional financial arrangement for their marriage.
Also, for some couples, a prenuptial contract may be entirely unnecessary. Certain legal issues such as child support, child custody, and others must be addressed in divorce proceedings if a couple divorces. In a divorce, courts do not enforce provisions regarding these issues in a prenuptial agreement. In addition, a prenuptial agreement is usually not particularly helpful for younger couples who have not yet acquired a significant amount of property.
It costs money to draft a valid prenuptial agreement. Ideally, each prospective spouse should have their own legal representation during the negotiation and drafting of the agreement. It might take time to agree if significant assets or interests are involved. It might get expensive and only be justified when significant financial interests are at stake.
How Can I Make Sure My Prenuptial Is Valid?
In the past, courts may have viewed prenuptial agreements skeptically because many tended to involve a legal waiver of financial and legal rights by the spouse in a weaker financial position.
Second and subsequent marriages have become more common and prenuptials make more sense in these situations. In addition, women may have a more equitable financial status, so a court is more likely to uphold a prenuptial. If the agreement is understandable and both parties have the opportunity to negotiate, a court may be more likely to enforce a prenup. If both parties had legal representation when the prenup was negotiated, it might make it even more likely that a court would enforce it.
Do I Need the Help of a Lawyer for My Prenuptial Agreement?
A prenuptial agreement is basically a contract. If you have questions about whether a prenuptial agreement would be of help to you in your marriage, you want to consult an experienced prenup attorney.
Your attorney can explain what issues a prenuptial can address and what issues they cannot effectively address. Your attorney can explain how it can help to protect each spouse’s legal rights. If a couple has decided to draft a prenuptial agreement, it is best to have a knowledgeable attorney advise you of your rights and how a prenuptial would affect them.
