The summer months have traditionally been the most popular for weddings, which could be why calls to my office from couples seeking prenuptial agreements tend to increase each spring. Following is an “encore presentation” of an article regarding such agreements that was published on this site last July.
A prenuptial agreement is a written agreement that both members of a couple enter into before their marriage. This agreement spells out how assets are distributed in the event of divorce or death. Though they are commonly associated with wealthy couples, in reality, couples from any socio economic background can seek a prenuptial agreement. In order for the agreement to be valid, both parties must enter into it knowingly and voluntarily. If any coercion is involved, the agreement is invalid.
Many couples avoid prenuptial agreements because they don’t want to believe that their marriage could end in divorce. Yet a “prenup” does not have to mean that you are hostile toward your future spouse. In fact, it can actually be a way to make sure you and your spouse are on the same page during the marriage and avoid hostility during a divorce. Here are some of the top reasons for getting a prenuptial agreement:
1. You don’t want your spouse to own a piece of your business. In New York, if a business appreciates in value during the marriage, that appreciation can be considered a marital asset. That means without a prenuptial agreement, your spouse could receive a piece of your business, which could cause further tensions between the two of you and with your business partners.
2. You don’t want your spouse to have an interest in your professional practice. Likewise, without a prenuptial agreement, the increased value of a professional practice that you started before the marriage can end up being partially distributed to your spouse.
3. You expect to be a stay-at-home parent. A spouse who chooses to stay home with the child is not building retirement assets in their own name and could be seen as not actively contributing to the acquisition of other marital assets. With a prenuptial agreement, the stay-at-home spouse can be guaranteed an equitable share of the assets and a certain level and duration of spousal support.
4. You are wealthier. While prenuptial agreements are not strictly for the wealthy, many wealthy people find them worthwhile to guarantee that their partner is not marrying them for their money.
5. You own assets that you want to protect from being used to pay off your spouse’s debts. Many people own homes, businesses, and have savings prior to their marriages. In the event of a divorce, one spouse can file for bankruptcy, and without a prenuptial agreement in place, creditors might go after the other spouse’s premarital assets to help pay off that debt.
6. You have children by a previous marriage whom you want to make sure receive a proper inheritance. Without a prenuptial agreement, property that was yours can end up partially in the hands of the other spouse, who could then pass it on to his or her children instead of yours.
7. You want to keep certain heirlooms in the family. Similarly, if you have valued possessions that you wish to pass down to your children, you can specify it in a prenuptial agreement.
8. You want to avoid an expensive divorce. One of the biggest benefits of a prenuptial agreement is that it prevents drawn out, expensive legal battles over custody and property. You save money that might otherwise have been spent on attorney fees.
9. You want to protect your children from a nasty divorce. Since a prenuptial agreement can prevent a court battle, it also prevents relations between the spouses from deteriorating even further. Spouses are able to maintain a civil tone, which is better for all involved, especially the children.
10. You want peace of mind. You know that if your marriage fails, you have a “back-up plan” that provides you and your spouse with more control, so that neither of you will suffer unnecessarily.
It is important to note that if circumstances change, it is never too late to amend an existing prenuptial agreement – even after the wedding – or to craft a postnuptial agreement.