EVERYTHING YOU NEED TO KNOW ABOUT PRENUPS
Most people understand the basics of a prenuptial agreement but lack enough knowledge to understand how it can help them. In general terms, a prenuptial agreement, or prenup, protects each party’s assets in the event that the marriage breaks down and a divorce becomes necessary. A prenup can help determine other aspects of dividing up the marriage as well, addressing such issues as spousal support, inheritances, and other concerns that would usually be addressed in a divorce hearing.
DOES A PRENUPTIAL AGREEMENT ONLY HELP THE RICH?
It’s a common belief that only the wealthy can use a prenuptial agreement to protect their assets in a new marriage. While this may be more commonly known, a family law attorney can help anyone set up a beneficial prenuptial agreement. Since these documents have many uses, they can be drawn up to help anyone protect themselves from the fallout of a divorce. Regardless of an individual’s financial status, a family law attorney may suggest a prenuptial agreement for any of the following reasons.
Naming Children as Heirs
There’s no such thing as a traditional marriage anymore since many people remarry two or more times within their lives. This often means that one partner may have children from a previous marriage, who they wish to provide for upon their passing. Without a prenuptial agreement in place, the surviving spouse may have the right to claim all of the deceased spouse’s assets. The agreement drawn up by a family law attorney can ensure the certain property is passed to the children from previous relationships. Often, this is the only way a parent can ensure his or her children are provided for upon the individual’s death.
Establishing Financial Responsibilities
A family law attorney can also include clauses in the prenuptial agreement that spell out the financial rights and responsibilities for each individual. Among other things, a marriage brings two lives together in a financial partnership and, lacking any planning, that partnership can become confusing. The prenuptial agreement will spell out the roles each partner will play and how finances should be shared or divided.
Settling Assets and Physical Property
The most commonly known concern that a prenuptial agreement will address is the division of finances and property. A family law attorney can help settle these concerns in advance by creating an agreement that will determine who takes what property from the marriage. This can include dividing up savings, checking, and investment accounts, as well as determining what is to be done with real estate. Even determining how furniture, jewels, and other physical property is to be divided will be spelled out in the agreement. By settling these issues before the wedding, conflicts can be avoided down the road. This can make it much easier and much cheaper to file for a divorce if the marriage does fail.
Finally, a prenuptial agreement can help ensure each party is responsible for his or her own debts. When you get married, you’re not agreeing to take on the debts that individual brought into the marriage. While the laws vary from state to state, an agreement ensures each individual is only responsible for the debts he or she actively accrues as a partner in the marriage. A prenuptial agreement will ensure one spouse won’t compel his or her partner to take on their pre-existing debts.
WHAT IF YOU DON’T GET A PRENUPTIAL AGREEMENT?
Certainly, couples can and do marry without ever considering a prenup, but that may be a taking a bigger risk than most people realize. It means the state will have the right to settle these issues through the family court system. While each partner will have to hire their own family law attorney to pursue the issues that concern them, the final decisions will ultimately be left up to a judge. Even in cases where the divorcing spouses may agree on certain issues, they will still have to abide by the judge’s decisions.
In many cases, the spouses just don’t get along, and embittered feelings may affect the divorce. This may mean losing physical property that holds sentimental value or risking other assets. It may also mean that one spouse becomes liable for their ex-spouse’s debts. In that case, an individual may suddenly be responsible for paying off a debt they had no part in creating.
Leaving one’s fate in the hands of the state is a big gamble. There’s no telling how the court will interpret the laws, and it’s unwise to assume the judge will sympathize with one partner over another. The only sure way to protect oneself in a new marriage is to ask a family law attorney to draw up a thorough prenup. This way, each partner can ensure their concerns are addressed and their assets are protected.
POINTS TO REMEMBER IN CREATING A PRENUPTIAL AGREEMENT
While couples will have an experienced family law attorney draw up the prenup, it’s important to understand that certain stipulations restrict what can be included. When couples make an effort to understand the elements of a legally-binding agreement, they can save time and money in creating the document.
Fairness is an Important Component
Before a prenup can be approved, a judge will review it to ensure it’s fair to both parties. To speed up this process, it’s helpful for each partner to hire their own family law attorney to assist in the drafting of the document.
Allow for Changes in the Relationship
While fairness might be considered a subjective concept, it will have to be based upon the events that took place in the marriage. For instance, if the wife supported the husband, who later made $5 million, it might not be fair for the wife to receive nothing. At a minimum, the agreement should allow for some type of support payment or a percentage of the money earned during the course of the marriage.
Each Party Must Be Honest
In determining the terms of the prenuptial agreement, each party must submit proof of their financial assets and debts. This must be a full and thorough accounting of one’s finances. Omitting an account, or attempting to conceal money, may invalidate the agreement.
Addressing Premarital Assets
Under ordinary circumstances, the assets and property one brings into the marriage remain that individual’s sole property. This includes money that one partner had prior to the marriage. For instance, if the wife inherited $5 million prior to getting married and divorced her husband 10 years later, the remaining balance of that $5 million is still her sole property.
Addressing Spousal Support
While many assume this is a primary goal of establishing a prenup, not every agreement addresses alimony or spousal support. If the issue is not addressed, either spouse can sue the other for support. However, an agreement that waives the right to seek support is binding, which means neither spouse can seek alimony in the event of a divorce. Even if an individual agrees to waive this right at the start of the marriage, but later changes his or her mind, they cannot assert their right to support at the time of the divorce.
The laws concerning the terms of a prenuptial agreement are complex, and they vary from state to state. To learn more about drawing up an agreement, it’s important to consult a family law attorney as early as possible. Waiting too long, or compelling a partner to sign a pre-made agreement, may invalidate the document. For a durable and legally-binding document, it’s best to work with an experienced family law attorney.