Everything you need to know about Prenuptial Agreements
Let’s face it, prenuptial agreements, get a pretty bad rap.
“Prenuptial agreements are not romantic.”
“I don’t want to pre-negotiate my divorce when I am supposed to be getting married forever.”
“Having a prenuptial agreement will jinx my marriage.”
“I’ve heard they don’t hold up in court and aren’t even worth the paper they are written on.”
“A prenuptial agreement takes all of the love and trust out of a relationship.”
Prenuptial Agreements are Romantic
There is actually nothing more romantic, loving, or trusting than the ability to be honest and communicative about the expectations each party has when entering into a marriage.
Many couples moving through the haze of engagement and wedding planning don’t always realize that a marriage is a contract by law. And, contrary to popular belief, the legal part of getting married has nothing to do with the vows exchanged on the day of the wedding. Rather, it is the actual signing of a marriage licence that actually binds a marital partnership by law.
Unfortunately, an astonishing number of people who sign up for marriage (literally) have no idea what the legal terms of that marriage certificate are...perhaps until they find themselves contemplating divorce. Not everyone needs a prenuptial agreement. But everyone should have the kind of conversations they would have prior to entering into any contract. My advice to those who inquire is generally the same.
1. File your Prenuptial Agreement with Prenup Planner
Each state has its own rules for the creation of an enforceable prenuptial agreement. The statutory laws can be determined by going online, calling an attorney or visiting the Prenup Planner website. Prenup Planner helps individuals draft and negotiate their own documents in a cost-effective way, then refers them to competent and reasonably priced attorney to fine tune and sign off on the agreement, making certain it is statutorily enforceable, etc. If more assistance is needed, qualified attorneys can draft the agreement for users based on the terms and specifications you provide.
- A valid prenuptial agreement enables you and your future spouse to decide how your affairs and assets will be settled and divided in the event of a separation or divorce. Your lawyer will work with you to draft a custom prenuptial agreement for your unique situation.
- Prenup Planner includes a free initial consultation, providing a 30-minute phone call to meet your attorney and talk about how you'll work together.
- There are no time limitations. You may contact your attorney as many times as you need to complete your agreement to your satisfaction.
- It’s totally private. The information you share and everything you discuss while working together is protected by attorney-client privilege.
- Prenup Planner also moves at your pace, your draft will be completed within three business days.
2. Get educated about marital law and community property in your state
Educate yourself about the laws in your state. In California, for example, the day you get married, everything you earn, create, or receive in consideration for services rendered during the marriage is characterized as community property. If you write a script, paint a painting, win the lottery or perform at a kid’s birthday party as the magician and receive payment, that script, painting, lotto winnings, or magic money belongs one half to you and one half your spouse. Monies earned and deposited into bank accounts, investments and retirement plans are also jointly owned.
3. Define the terms for seperate vs. community property in your marriage
Individuals can agree to change the nature of separate or community property. For example, if one spouse owned a house separately before marriage, that house would ordinarily remain the spouse’s separate property in the event of divorce, but the couple can agree to make it community property instead.
Spouses can also agree that community property, or earnings during marriage, remains separate, as opposed to divided equally in the event of divorce. In equitable distribution states, where the characterization of property is less clear, prenuptial agreements can make things simpler by allowing couples to decide how they want property held or owned at the outset.
What is Alimony or Spousal Support?
If you are the breadwinner or person who earns more in your marriage, you will likely have to pay or supplement the other person’s earning as spousal support or alimony if you separate. While you may be fine paying for vacations, gym memberships, and car insurance for your spouse when you are happily together, will you still be comfortable supporting that lifestyle in the event of divorce?
Having a discussion about the possibility of a prenuptial agreement makes a great deal of sense if, for no other reason, both parties get an education about marital law in their state. It gets you talking about what is, admittedly, not the sexiest part of a relationship, but could very well give each of you a better understanding of what is expected of you in this partnership, which I’m guessing you both hope will last until death do you part.
For example, a second marriage for an executive who has a long and profitable career launching internet startups may be an opportunity to opt out of the community property structure. She already divided 20 years of her earned savings and retirement when she split from her first husband. On the other hand, the heir to a wealthy family need not worry about having to give his or her inheritance to an ex, as it is characterized as separate property. However, if the couple is living a lifestyle that is sustained by the inheritance, this will be taken into account in calculating the support payments, which are sure to be requested. A prenuptial agreement can limit the amount and duration of that support to something reasonable.
It's Okay to Talk About a Prenuptial Agreement with your Partner
How and when to begin the “prenup conversation?” This is a tricky one based on the cultural taboo perception of prenuptial agreements. We’re striving to change the way people look at and think about relationships, marriage, parenting and divorce. If people were more accustomed to the idea that marriage is a contract that governs financial expectations during and (perhaps) after a marriage, they would not be nearly as disturbed by the suggestion of altering said contract in a manner beneficial to both of them, making things much easier to understand and discuss during the marriage, or after, in the event of a divorce.
How to approach conversations about Prenuptial Agreements with your partner
It’s best to approach conversations that involve prenuptial agreements early on in a serious relationship that is approaching the possibility of marriage. In addition to statutory restrictions that require an agreement to be presented, signed, and closed within a certain window before the wedding date, there is a real benefit to broaching the subject either before or at the time of the engagement. Nobody wants to be wedding planning, having their final dress fittings and cake tastings while arguing the terms of a prenuptial agreement. Get it done ahead of time. This way nobody is surprised or offended. Both parties have time to find counsel and consider the terms and options. The agreement can be finalized well beyond the wedding date, put away, and hopefully never thought about again.
Legal Requirements for a Prenuptial Agreement
There are also requirements that neither party be under duress at the time a prenuptial agreement is executed. Duress is a threat of harm made to compel someone to do something against their will or judgment; especially a wrongful threat made by one person to compel a manifestation of seeming assent by another person to a transaction without real volition (Black's Law Dictionary 8th ed.). If the dress is fitted, the venue rented, the guests have all flown in from out of town, and the refundable period for contracts for flowers, band and caterer lapsed, a party to a prenuptial agreement could argue that he or she was under duress at the time the contract was signed.
As previously mentioned, in most states, both parties must also have counsel (attorneys) who have reviewed and signed off on the agreement. They also must have an understanding of what they signed, which includes a grasp of the English language or a certified translation of the agreement in the party’s native tongue.
Most states have strict statutory disclosure requirements for prenuptial agreements to be rendered enforceable. This means that each party must receive complete information about the other spouse’s property and finances prior to signing the agreement.
Provided that the above requirements are met, the couple can agree to limit, or even completely give up, rights to spousal support in the event of divorce, as long as the result is not "unconscionable"—meaning super unfair. It isn’t clear exactly how unfair the results would need to be, but if a situation is extreme—for example, if one spouse would be destitute or forced to turn to welfare while the other still had ample means to provide support—the court would be unlikely to uphold that provision in the agreement.
Spouses can also agree to waive or limit inheritance rights and include certain provisions in a will or trust, provided that such agreements don’t negatively impact the support rights of any minor children. Parents with children from previous marriages often want a new spouse to waive or limit inheritance rights to make sure that assets will be passed on to their children from earlier marriages or relationships.
How to have a positive & successful Prenuptial Agreement experience
However you approach a prenuptial agreement, the point is to openly communicate before entering into the marriage contract. This increases the understanding each of you will have during your marriage and reduces the emotional agony and financial devastation in the event of a divorce. Prenup Planner can assist with the process from start to finish and ensure it is done quickly and cost effectively.