Prenuptial Agreements

Unless estate planning documents, such as a Prenuptial Agreement, create other arrangements, your spouse has an automatic entitlement to part of your assets.  A Prenup allows you to direct how your property and savings are divided in the event of death or divorce.

Most people associate a prenup only with the possibility of divorce. In addition, prenuptials are often viewed as unromantic, uncaring contractual documents that contradict the romantic aspect of marriage.

All of this stigma can cause what’s known as the prenuptial agreement dilemma; a difficult choice between making a marriage practical and keeping it romantic.

However many (if not most) prenuptial agreements are written not in anticipation of divorce, but in anticipation of death. And taking care of your surviving spouse after your death is arguably one of the most romantic, responsible actions you can take.

Moreover, rather than "doomsaying" documents that foretell a bitter divorce, prenuptial agreements can actually bring harmony to your marriage by settling financial issues and keeping them from creating conflict during your life together and afterward.

A prenuptial agreement, however, is not right for all couples. If you and your soon-to-be-spouse were not previously married and have neither children nor any substantial assets, then a prenuptial agreement may not be necessary.

For everyone else , though–and especially people in their 30s or older with any substantial assets, children, or a former spouse–a prenuptial agreement is strongly encouraged.

Prenuptial agreements are particularly useful for people who are entering into a second marriage. In the case of remarriage, one or both spouses may already have significant assets, and may want to arrange that family members from the first marriage inherit property and assets.

Once you are remarried, in fact, your new spouse has an automatic entitlement to part of your assets, unless estate planning documents, such as a prenuptial agreement, create other arrangements.

What types of arrangements can a prenup address?

  • A prenuptial agreement can protect your assets accumulated prior to your new marriage so that, for example, children from your previous marriage may inherit those assets.

  • You can also use a prenuptial to have your new spouse waive rights as a beneficiary of your retirement plan.

  • Your prenup can indicate that funds and income from a certain source (such as a business, stock portfolio, etc.) belong to one or both spouses, and in what proportions.

  • The agreement also can indicate which debts are the responsibilities of one or both spouses, and in what proportions.

  • The agreement can determine which of the spouses will manage business, investment, and banking details. And of course, one spouse can make arrangements to distribute any type of assets to the other spouse.

Even if you are not entering into a remarriage, but you are bringing into your first marriage significant assets (and/or liabilities), a prenuptial arrangement might be a good idea.

A prenup is also a good idea if the newly married couple have a large difference in age or financial status. The spouse with the majority of the assets will want to protect those assets and control their distribution, while the person with fewer assets will want ensure receipt of some of the marital property in case the marriage ends due to divorce or death.

What are the guidelines for creating the agreement?

A prenuptial agreement is valid only if it is created under two conditions:

  1. There must be "full disclosure" between the two parties, in order that there will not be a finding of fraud, misrepresentation, or duress (a finding which would invalidate the prenuptial agreement). Both you and your spouse must thoroughly disclose your financial details: income, assets, and liabilities, in the document.

  2. Each spouse must individually be represented by separate attorneys prior to signing the prenuptial agreement, again to reduce the risk of drafting and agreeing to an unfair agreement

We are experienced in all aspects of marriage planning. Do not hesitate to contact us to determine if a prenuptial (or postnuptial) agreement would be appropriate for you and your spouse.

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