As we get older we’re supposed to get wiser. In fact, I would rank increased wisdom at the very top of the benefits of aging. So why do so many people enter their second or even third marriages ignoring what they know? The statistics prove these marriages are more likely to end in divorce than first marriages.
If you’ve been divorced before, you know what you don’t want from a future divorce: You don’t want the process to take forever and be expensive. You don’t want to have little control over the process. You don’t want to end up hating your ex-spouse. A thoughtfully negotiated prenuptial agreement can help you avoid all of this by making it clear what financial expectations each spouse has during the marriage and what the outcome will be if the marriage ends.
If any of the following situations describe you and your future spouse, it would be very wise to sit down together to discuss your expectations and consider whether a prenuptial agreement will help reduce the stress of your marriage and possible divorce:
- You still have obligations to support an ex-spouse or children. Unless you’re planning to pay your obligations with pre-marital savings or inherited funds, you’ll probably be using income that you’re earning during the marriage. Without a prenup, one-half of every dollar paid for spousal and child support is coming from what will be seen as your future spouse’s marital property. Perhaps he or she is fine with this going into the marriage, but these feelings could change if the marriage ends. A prenuptial agreement can help you address what consideration will (or won’t) be given for all the marital funds that were used to pay your pre-marital obligations.
- Your right to spousal support from your first spouse ends if you get remarried. If you were receiving a substantial amount of spousal support under the terms of your first marriage, it may not be financially prudent to get remarried or even live with a new partner. A prenuptial agreement can address how you and your new spouse will pay for certain expenses in a way that allows you to maintain the lifestyle you had following your first divorce and allow you to move forward in a new relationship with the same kind of financial security that you had when you left your first one.
- You plan to keep your finances completely separate. Many couples happily live this way, but without a prenuptial agreement that clearly defines what will be viewed as separate property versus marital property, the divorce laws will still control. That means that all income you earn and all debt you incur will likely be seen as marital assets and liabilities even if you kept separate accounts throughout the marriage.
- You plan to reside in a home that one spouse owned prior to the marriage. Is there a mortgage on this home? Will the owner’s income (ie, marital property) be used to pay the mortgage or make improvements and increase the equity? You may want to address whether the non-owner spouse will receive a credit at the end of the marriage. You may also want to address when the non-owner spouse needs to vacate the home if one of you chooses to end the marriage.
- You plan to provide financial assistance to adult children from your prior marriage. I’ve seen this cause a lot of stress and resentment at the end of marriages. A prenuptial agreement can address how much each of you can give to adult children without needing the consent of the other spouse and make it clear when a discussion is necessary.
- You plan to leave a large majority of your estate to your children or someone other than your future spouse. In New York, surviving spouses are entitled to at least one-third of your estate. If your intention is to leave your future spouse less than that amount, you need him or her to waive these estate rights in a prenuptial agreement.
Prenuptial agreements provide an opportunity to have “that” conversation. A conversation about expectations. And values. And the “what ifs” of life. And, if you hire the right attorneys to assist you in having a respectful conversation about these issues, it can be a fairly easy conversation to have. Plus, it’s just wise.
As always, if you have any questions or would like to get started, contact me.
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