If you’re soon going to be walking down the aisle, you should consider a premarital agreement. Also called a prenup or a prenuptial agreement, this is a contract you and your partner sign before you get married. It lists what assets you are both bringing into the marriage and outlines what will happen if the marriage ends due to divorce or death of one spouse.
Of course, no one wants to think about their marriage ending. However, a prenup can set you up for success. Let’s look at exactly what a premarital contract covers and who can benefit from having one.
Benefits to Having a Premarital Agreement
Prenup contracts make any divorce easier, because they determine asset division during a separation. That said, there are benefits to signing a prenup even if you know that divorce will never be in your future. Here are just a few reasons to consider signing one:
- Put family members’ minds at ease. If one partner is coming into a marriage with more assets than another, family members may feel cautious. A premarital contract can help to reassure anyone who might be questioning the marriage.
- Ensure children from previous marriages receive their inheritance. Even if you have wills, a surviving spouse can change their will after the first spouse dies. A prenup is binding for both parties, even after the death of one partner.
- Go into your marriage with eyes wide open regarding finances. A premarital contract requires financial disclosure. That’s not to say that your future spouse is hiding things from you. Many couples go into marriage not fully understanding their spouse’s income, savings, property, and debts.
- Agree on how you want finances handled during your marriage. A prenuptial agreement doesn’t have to cover only what happens during a divorce. It can also outline how you want to handle finances during your marriage as well.
- Assign debts to one spouse. This can limit how creditors can collect upon debts and protect assets you own jointly. It could make sense for your marriage, especially if one spouse has large debts such as student loans. Keep in mind, the assignment of debt to a spouse will not prevent a creditor from coming after the other spouse if it is a joint debt or a debt in the other spouse’s name.
In short, there are plenty of reasons to sign a premarital agreement even if you are completely in love and know you will never go through a divorce. We can help you draw up this contract so you are protected.
Who Needs a Prenup?
One common myth about premarital agreements is that you only need one if you or your future spouse is rich. This couldn’t be further from the truth. All couples can benefit from a prenup.
Even if you are both coming into a marriage with few assets/debts and no previous children, a prenuptial agreement can be beneficial. After all, they don’t just protect your current assets. They also protect future assets.
We don’t know what will happen in the future. However, it is entirely possible to find yourself in any of the following situations:
- A discrepancy in earning, with one spouse having a much higher income than the other
- One spouse inheriting money or property from a family member or friend
- An employer of one spouse starts to pay for perks, such as a company car, which could be considered a form of income during a divorce
- You win a large sum of money, either together or individually
- One spouse incurs debts solely in their name
This is just a sampling of what the future could hold. A prenup will address future assets and debts, in order to determine property division during a divorce.
A premarital agreement can also address alimony. Right now, you and your spouse might have relatively equal incomes. However, this could change in the future. One of you may change careers, leading to a drastic salary increase or decrease, or one of you may leave a career to raise children. Your finances might look very different than they do today.
Prenups and Child Custody/Support
One financial situation a prenup cannot address is how you will provide for future children. You can outline some financial agreements regarding children who already exist. However, you’ll need to determine child support during an actual separation. It wouldn’t be fair to the child to make those decisions in advance, given how easy it is for finances to change.
Likewise, you can’t include child custody agreements in your prenup. A judge will want to ensure that you are both making the best decision for the child at the time of a separation. So much can change over the course of years or even months. The decisions you make for hypothetical, future children today might not be the best decisions in the future.
Some Other FAQs About Premarital Contracts
The best way to have your questions answered is to speak to one of our knowledgeable family law attorneys. We can review your case to give you specific advice on your premarital agreement. However, here are a few other frequently asked questions about prenups.
Can I sign a prenup after we are married?
No, but you can sign a postnuptial agreement. This works the same way, but you’ll sign it at any point after a wedding. You can also make amendments to your prenup at any time after you have been married. Also note, alimony cannot be addressed in a postnuptial agreement, only property division.
Will a judge throw out an agreement that isn’t fair?
In some cases, yes. If you or your spouse did not disclose all financial information, or if one partner did not voluntarily sign it, a judge may decide the contract is partially or fully invalid. A judge can also determine that some provisions in a contract are unreasonable. That’s why it is important to have a family law attorney you trust. We’ll help you draw up a prenup that is fully enforceable, should you ever need it.
Keep in mind, Morgenstern & Associates is ranked as a Tier 1 family law firm in metropolitan areas by US News & World Report. Additionally, Barbara Morgenstern and Ashley Bennington are both board-certified family law specialists by the State Bar.