Not everyone needs a prenuptial agreement. In fact, most couples don’t benefit from a prenuptial agreement when there aren’t significant premarital assets that could be contested in a divorce. However, depending on your circumstances, a prenuptial agreement may be able to help protect you in the event of a divorce.
What a Prenuptial Agreement Can Do
In most cases, it’s presumed that the assets you acquire during the marriage are subject to equitable division in the event of a divorce. But what about assets that you purchased and invested money into prior to the marriage, but paid off with income earned during the marriage? In that case, the asset becomes a commingled, meaning that your spouse would have an equitable claim to it in the event of a divorce. In other words, they could argue that they should receive some value for a portion of the asset that could be deemed marital property. A prenuptial agreement can ensure that the assets you and your spouse bring into the marriage are protected in the event of a divorce. A prenuptial agreement can mitigate alimony as well. The parties can agree prior to the marriage what the alimony obligation would be in the event of a divorce. Prenuptial agreements can protect both you and your spouse from debt as well. For the most part, a prenuptial agreement can help ensure that separate debt stays separate. These agreements can also set expectations for the marriage and help couples get on the same page regarding finances. Prenuptial agreements can also make divorce a smoother process since they detail what is marital and what is separate property. Assuming the prenuptial agreement isn’t challenged, it can make a divorce process smoother and less expensive.
What a Prenuptial Agreement Cannot Do
A prenuptial agreement can have just about any arrangement you’d like to make. However, if it disproportionately benefits one party, it can be challenged or even thrown out. A prenuptial agreement isn’t intended to make sure your spouse gets nothing in the event of a divorce. Instead, it’s intended to protect both parties. A prenuptial agreement cannot waive child support. In some cases it cannot waive alimony. The courts will find that a waiver of alimony is not valid where the provision would require a party to be without financial support requiring state assistance. A prenuptial agreement cannot completely protect you from everything. Therefore, we don’t necessarily recommend that everyone gets one, especially if you do not have a lot of assets at the time of the marriage. A prenuptial agreement cannot bargain away child-support, or any financial obligations to the child. And a court may find that predetermined custody arrangements are also unenforceable.
Marriage after 35
If you’re getting married after 35, and you already own significant assets, and/or have a lot of retirement savings, it may be a good idea to speak with an attorney about getting a prenuptial agreement to protect your assets. Getting divorce later in life can be more financially difficult because it will affect most people’s retirement plans. If a person you’re marrying acquires a large amount of debt, or is in a large amount of debt prior to the marriage, you want to do what you can to ensure you don’t have to pay for that debt.
Someone Else Is Financially Dependent on You
If you have children from a previous marriage, or a relative that’s financially dependent on you, a prenup may be able to protect the child’s inheritance. If you have assets that you’d like to pass on to your children, having a prenup can ensure that you’re able to pass the items on to your children. Though many of the assets brought into a marriage will be considered separate property, a prenuptial agreement can ensure that they stay separate property in a divorce.
Alimony Is a Concern
If you have concerns about the alimony you’d be ordered to pay in a potential divorce, a prenup can help protect you. However, it should be noted that a prenup will not completely protect you from alimony. You may still be ordered to pay alimony even if you have a prenup. It’s against public policy to allow for a person to negotiate away spousal support where the agreement would place a responsibility on the public to pay for the former spouse. If the spouse will require public assistance, the court will require spousal support to be paid to avoid the public having to pay for the support and care of the indigent spouse. Alimony can be waived in its entirety in a situation where both parties are able to financially support themselves through earned income or other financial support such as assets or a trust. This is especially true in cases where the couple was married for a long time and one party was unemployed for the majority of the marriage, and/or did not have a substantial education or training.
When You’re Considering a Prenuptial Agreement
If you and your spouse are considering a prenuptial agreement, you both need to speak with separate attorneys in order to ensure your prenuptial agreement protects both parties. At CoilLaw, we have years of experience helping clients with their prenuptial agreements. Contact us today to find out more about how we can help you.