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Congratulations, you’re getting married! You’ve probably spent a lot of time reviewing rings, gowns, venues, and the like, but one of the most important considerations, the prenuptial agreement, may have been completely overlooked. The “prenup” is often dismissed as a prerogative of the rich and famous, but in fact it can benefit most couples.
Getting on the same page about each spouse’s financial picture can make a marriage stronger, as money is one of the top reasons why marriages fail. While it may be beneficial for a young, first-marriage couple to have a prenup to protect their non-marital assets, it is equally important to ensure that the parties work together building their future as opposed to living financially independent lives.
If you’re a millennial bride, you may have student loan debt. A prenuptial agreement can specify how that premarital debt is paid and from what source. On the other hand, if you’re part of an older generation, you’re probably bringing assets and possibly even children into the marriage, and you may wish to protect family property and other assets. Same-sex couples are also prime candidates for prenuptial agreements, particularly in light of a recent Supreme Court ruling clarifying that marriage is a right bestowed on all couples. These marriages are unique because many same-sex couples have lived together for years while acquiring property, establishing careers, and essentially living as a married couple. A prenup provides the ability to delineate which assets are considered marital and how to deal with alimony and other support issues.
People are sometimes hesitant to discuss a prenuptial agreement with their soon-to-be spouse because of the implication that a failure is expected in the marriage. Although it is true that one out of two marriages ends in divorce, the prenuptial agreement protects the parties in a number of other scenarios, including death – it’s also “insurance” against a contentious divorce.
Without a prenuptial agreement, the fate of assets in divorce is determined by the state you live in and the judge assigned to the case. The majority of states use an “equitable distribution” scheme, according to which the court uses statutory factors to divide the parties’ assets and debts fairly and which may include the contribution of one spouse to the career of the other, the desirability of maintaining the home for the benefit of the children, and the economic circumstances of the parties, among others.
Prenuptial agreements are extremely flexible tools. The content can vary widely, simply protecting a single asset such as a business or family interest, or it can be completely comprehensive, including any and all financial issues. It can also contain non-financial clauses and considerations, such as a “bad boy/girl clause” to cover situations where infidelity has been an issue. Accordingly, certain penalties, including liquidated damages, can be imposed if a party strays. These clauses must be carefully drafted to avoid being considered vague and unenforceable, or against public policy.
Regardless of the prenup’s actual scope, you should seek the help of an attorney who is an expert in the field and who practices with compassion. He or she will help you say “I will” to a prenuptial agreement before declaring “I do” at the altar.
Mitchell K. Karpf, managing shareholder of Young Berman Karpf & Gonzalez and a Board Certified Marital and Family Law Lawyer and a Board Certified Family Trial Advocate, focuses his practice on complex, high-net-worth marital and family law cases.
Categorized in: After the Wedding, Blog, Legal and Financial, Planning, Trends and Ideas