Should I Consider Getting a Prenuptial Agreement?
Couples who are entering into a marriage often hesitate to broach the subject of a prenuptial agreement because they do not want to consider the possibility that their marriage may not work out. While a prenup may not be necessary for all couples, it is something that one or both spouses may want to consider, particularly if there are considerable assets involved, or one spouse is entering the marriage with a significant amount of debt. Although it is the general assumption that prenups are only for extremely wealthy couples, even those who earn a more modest salary may wish to consider a prenup in order to protect their finances, and other assets in the event that the marriage ends in divorce. If you have questions, or wish to know more about prenups, and whether you should have one in place, contact a skilled divorce lawyer as soon as possible.
What Is a Prenup?
A prenuptial agreement — or “prenup” — is a legal contract that establishes the property and financial rights of each spouse in the event of a divorce. The contract is created before the couple is married, and generally includes a list of all of the property that each spouse owns, and what each spouse is entitled to after a divorce. A prenup also lists any debts that each spouse brings to the marriage, and who is responsible for that debt if the marriage ends. In addition to distributing financial assets, a pre-up may also address other important issues like spousal support and inheritances.
When couples are able to have an open, honest discussion about a prenup, it forces them to discuss their financial goals, overall attitudes towards money, spending and savings habits and significant debts that either spouse has accumulated. While this topic of conversation may not be particularly romantic it can help avoid problems down the road. One of the leading causes of divorce in this country is money-related issues, so having these conversations before entering into a marriage can create a strong foundation and avoid common financial problems.
Why Should I Consider a Prenup?
Prenups are no longer just for the wealthy, in fact, it is much more common for couples of more modest means to use a prenup to protect their interests. The following are some of the most common reasons for getting a prenup:
- Pass property to children from a previous marriage. If a couple has children from a prior marriage, a prenup can specify when will happen to their property when they die, and ensure that certain property is passed on to the children. If there is no prenup, the surviving spouse may be entitled to a significant portion of the deceased spouse’s property, leaving significantly less to the children.
- Clarify financial rights. Regardless of how wealthy a couple is, or whether or not they have children, they may simply want to have a legal document that clarifies their financial rights and responsibilities during their marriage.
- Avoid arguments in the event of a divorce. It is normal for emotions to run high during the divorce process. Having a prenup in place can help avoid financial-related arguments if they have been addressed in the prenup.
- Protection from debts. A prenup can also protect one spouse from the other spouse’s debts.
What Are the Main Benefits of a Prenup?
While many couples are afraid that even discussing a prenup with each other will cause tension in their relationship, this does not have to be the case. There are a number of benefits associated with having a prenup, including the following:
- Distinguishing what is marital property and what is separate property.
- Documenting each spouse’s separate property, and protecting it as separate property.
- Supporting your estate plan and avoiding lengthy court proceedings that become necessary to decide property distribution.
- Establishing rules and procedures in the event that issues arise in the future.
- Avoiding conflict in the event of divorce.
- Assigning mortgages, school loans, credit cards and other debt to the appropriate spouse so that both spouses do not share debt liability.
While there are benefits to having a prenup in place, the following are examples of some of the downsides that should be considered:
- Could have a negative impact on the relationship.
- The timing may not be ideal, in which case you could consider a postnuptial agreement, which is an agreement that is made after you are married.
- Does not include child support or custody issues.
- The court may set aside provisions that it finds to be unfair or not in the interest of justice.
- A prenup does not address issues like where children should spend the holidays, what religion they should follow or what school they should attend.
Who Should Get a Prenup?
Prenups are becoming much more common, and not just among couples going through a high-asset divorce. The following are examples of individuals who should strongly consider getting a prenup:
- Spouses who were previously married. This is particularly true if one or both of the spouses went through a bitter and contentious divorce and is unwilling to marry without protecting their financial future.
- Spouses who have children. A prenup will ensure that assets remain separate property. The spouse who has children can create a living trust that will provide for his or her children if he or she passes away.
- A spouse who is much wealthier than the other. When there is a significant disparity of wealth between two people, a prenup will protect the assets of the wealthier spouse and assure that one or both parties are not marrying for the money.
- A couple with one spouse who has considerable debt. A prenup can protect a spouse from being financially responsible for the other spouse’s debt. In addition, if one spouse spends money much more freely, a prenup will prevent the other spouse from being responsible for debt incurred by overspending.
- Spouses who own a business. If either spouse owned a business before getting married, it is highly recommended that a prenup is in place as a divorce can destroy a family business. A prenup will also ensure that the business owner has full discretion over how the business is managed.
- Spouses who want to keep their personal life private. Prenups recognize individuals’ right to privacy. For example, if both parties agree to the terms of the agreement, neither spouse may disclose, publish or provide information about the other individual.
- Spouses who may receive an inheritance. An inheritance is considered separate property, unless the couple takes steps to make it marital property. A prenup will protect the inheritance and ensure that it remains separate property.
When Should I Initiate the Prenup Process?
If you are considering a prenup, discuss the issue with your fiancé as soon as possible, ideally at a time when emotions are not running too high. If you are the person who is initiating the prenup, make it clear that it is simply a precaution and that you are not suggesting that your partner is marrying you for your money. Discuss the issue as lovingly as possible and be willing to work through any issues that your partner may have. While the timing may be different for each couple, it is recommended that you finalize your prenup at least 30 days before the wedding. In most cases, the person who earns the most income will hire an attorney to prepare the prenup agreement. The other party may hire a separate lawyer who will review the terms of the agreement and suggest possible edits or changes. Once the draft has been approved, the agreement is executed.
What If I Do Not Have a Prenup?
If you choose not to have a prenup written and signed before you get married, ownership of your property will be determined by your state laws. This could even impact property you owned before getting married. By law, marriage is considered a contract between the two individuals. That contract entitles each spouse to certain automatic property rights. If there is no prenup, your spouse may have the right to the following:
- Shared ownership of property acquired during marriage, with the assumption that property will be divided if the couple divorces or one of the spouses dies.
- Shared management and control of marital or community property, and may include to right to sell or give it away.
- Accumulate debts over the course of the marriage that the other spouse has to pay for.
Morristown Divorce Lawyers at Lyons & Associates, P.C. Assist Clients with Prenuptial Agreements
If you are getting married and you are considering having a prenup, contact our experienced Morristown divorce lawyers at Lyons & Associates, P.C. To schedule a free, confidential consultation, call us today at 908-575-9777 or contact us online. Our offices are located in Somerville, New Jersey and Morristown, New Jersey, where we service clients throughout the state, including, but not limited to those residing in Bedminster, Parsippany, Rockaway, Short Hills, Chatham, Randolph, Madison, Morris Plains, Bridgewater, Woodbridge, Basking Ridge, Mendham, Morristown, South Plainfield, Somerset, across Somerset County, Morris County, Union County and throughout New Jersey.