Prenuptial Agreements – Saying I Do While Protecting Your Interests

With the rising rate of divorces across the globe, more and more new couples are protecting their interests by turning to prenuptial agreements – a written contract that lists each partner’s assets and debts and outlines each person’s property rights should the marriage fail.

While popular opinion is that prenups are the domain of the wealthy, couples of more modest means are also able to benefit. Below are some instances whereby people from all walks of life may find a prenuptial agreement useful:

  1. Passing on property to children from a previous marriage: a couple who have children from a previous marriage may choose to spell out what will happen to their estate when they pass on, in so far as they may choose to pass on separate assets to their children, while still providing for the surviving spouse.  Without a prenuptial in place, the surviving spouse may have a larger claim of the other spouse’s estate, leaving much less for the children.
  2. Clarifying financial rights and protecting themselves from the other spouse’s debts amongst a myriad of other concerns: prenups are valuable documents that can clarify each partner’s responsibilities during the marriage.
  3. Avoid arguments if the marriage fails: a prenup can mainly be used in determining whether or not a spouse will receive alimony or how any property (whether earned before the wedding or afterwards) will be shared in cases of divorce. There is a lot of scrutiny around wavering alimony, and a few states outright deny this waver, so it may be a good idea to consult a lawyer before inserting a clause like this.

What if I Don’t Want to Make a Prenuptial Agreement?

Prenuptials are by no means mandatory, and many couples forgo these agreements entirely. However, if you do not have a prenuptial in place, it will be your state’s laws that determines who owns any property acquired during the marriage, and what happens be it in the case of divorce or death of a spouse. These laws may even have a say regarding property acquired by either spouse prior to the wedding.

According to the law, a marriage is a binding contract between the couple and carries certain automatic property rights for each spouse. In the absence of a prenuptial, each partner usually has a right to:

  • Share ownership of assets acquired during the course of the marriage, with the expectation that the property will be divided more or less equally in the event of divorce or go entirely to the surviving spouse in the event of death.
  • Incur debts during the marriage that can be passed on to the other spouse to pay for – for example, a mortgage on the family home or a car loan.
  • Share the management and control of any assets, owned solely by either partner or jointly, up to and including the right to sell, give away or otherwise dispose of said assets with no legal repercussions.
  • If these laws – called marital property, divorce and probate laws – seem unpalatable to you, it might be a good idea to look into getting a prenup, which largely allows you to decide for yourself how your property should be handled.

Prenuptial agreements are becoming more and more commonplace and legal scrutiny is lessening. Traditionally, courts used to go over prenups with a fine-tooth comb, since they invariably involved the less wealthy spouse wavering legal and financial benefits, and these contracts were also thought to encourage breakups.

As time has gone by, with divorce and remarriage becoming more prevalent, as well as more gender equality, courts and legislation are becoming more friendly to prenups and increasingly more willing to uphold these agreements. Nowadays, every state accepts them, although any prenuptial that is judged to not meet state requirements or unfair in any way will shall be rejected.

Since courts still carefully review prenups, it is essential that you negotiate and word your agreement that is clear, understandable and legally sound. It is a good idea to have your agreement reviewed by separate lawyers and get some advice before signing – courts are less inclined to question its validity that way.

How to Draft a Prenuptial Agreement?

It is recommended that you approach your prenuptial in the same way as your approach any other of your marital decisions – in a spirit of fairness and partnership.

You want to ensure that your prenuptial is beneficial to both you and your partner and neither partner is being pressured or coerced into agreeing terms. This initial step will require some talking and compromising between partner but is well worth the effort in the long term.

You should also be willing to make full disclosure of any assets and debts – every state required that all prenuptial agreements be accompanied by a complete and written disclosure of both parties’ financial situations.

Once you have an outline of your prenuptial in place, work with separate lawyers to ensure that your contract passes muster. The reason why we suggest separate lawyers is to ensure that the agreed terms are fair and beneficial to both. Once you are happy with the agreement in place, sign your document, file it away safely and go on to enjoy your upcoming wedding.

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