By: Jason B. Alman, Esq.
Getting married is a beautiful thing, but it’s also important to be practical and think ahead to protect yourself, your assets, and your future. A prenuptial agreement, or “prenup,” can offer a range of benefits to couples who are preparing to tie the knot, and while it may not be the most romantic topic to discuss, they can be incredibly useful in protecting both your finances and emotions in case of a divorce.
Since 2010, prenups have become more common for young adults, particularly millennials. But what’s driving this trend?
Well, for one, an unpredictable economy is making prenups a necessity for many. While many assume that prenups are solely for the rich and famous, the reality is that anyone going into a marriage with assets and/or debt could benefit. Unlike the 70’s and 80’s where couples were getting married and starting a family at 20 years old, the median age for first-time marriages has recently increased to 28 years old. As a result of this delay in marriage, there has been a surge in prenups, as young adults have more time to accumulate assets and debts before entering into marriage. In today’s world, where there is an abundance of young business owners and entrepreneurs, the path to success can be unpredictable. You never know where your work may take you, and what opportunities may arise along the way. By safeguarding these businesses, concepts, and innovations, you can be protected and at the same time, share in the wealth and success with your partner during the marriage.
Prenups can also offer numerous benefits beyond asset protection. Couples have begun to utilize prenups to provide clarity on financial expectations and obligations during the marriage, including how to manage and control their property. One of the main advantages, however, is that a prenup can be a cost-effective way to avoid lengthy and expensive divorce proceedings. Rather than gearing up for litigation at a time when you’re experiencing heartache, a prenup can reduce the potential for conflicts and disputes by clearly outlining the terms of property division and spousal support, ultimately promoting a more amicable separation? Why leave it up to a judge when you can get creative and devise a solution yourselves? In essence, these agreements act as an insurance policy. By setting out clear guidelines for how property will be divided in the event of a separation, you can avoid the uncertainty and stress that often comes with legal proceedings. Instead of leaving it up to a judge to decide what’s “fair”, you and your partner can work together to come up with a plan that reflects your individual priorities and values.
While there appears to be an upward trend in signing prenups, many people still won’t consider signing a contract with their significant other as they believe it suggests a lack of trust or commitment in the relationship. Many view a prenup as “planning for divorce” rather than “planning for a happy marriage,” leading to negative feelings about the relationship during the time the couple may be working out the details for their wedding. There may also be issues down the road as to the validity of the prenup. In this case, even if a prenup is in place, it may not hold up in court, depending on the specific terms of the agreement and the laws of the state. This can lead to lengthy and costly legal battles, which can further damage the relationship. While prenups can be beneficial, it’s important to approach the topic with care and consideration, with open communication being key to navigating this potentially sensitive issue with your partner.
In this regard, the negotiation of a prenup can create tension and conflict between not only the couple, but with their respective families as well. This is because prenups outline the division of property and assets, which can cause concern or disagreement among family members. For example, a family member who has gifted or loaned money to one of the spouses may want to ensure that their contribution is protected in the event of a divorce. In contrast, the other family may not agree with the terms of the prenup or may feel that their own interests are not adequately protected. Such disagreements can result in family members taking sides and potentially damaging the relationship between the families, and more importantly the couple looking to tie the knot.
Of utmost importance, when it comes to negotiating and drafting a prenup, both partners should have their own private attorney. Using the same attorney can create a conflict of interest and potentially invalidate the agreement. While any licensed attorney may be able to draft a prenup, it’s essential to find an attorney that specializes in marital and family law. When the search for counsel begins, know your budget. As the cost of a prenup may vary depending on the complexity of the situation, the process could range from $1,000.00 to well over $50,000.00. Although free, do-it-yourself forms are available online, couples should invest in the cost of a professionally drafted and reviewed prenuptial agreement to ensure its validity and avoid costly legal battles in the future.
Lastly, don’t wait until the eve of the wedding to discuss this or plan to have the prenup executed. It should be fully executed, preferably no less than three months in advance of the wedding, although that is not a hardline rule. The closer the signing to the wedding date, the more susceptible it is to a challenge on grounds such as duress and coercion.
