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What Is a Prenup?
The prenuptial agreement ("prenup") is a contract between two people before marriage. In a prenuptial agreement, each party lists all the property they own (as well as any debts) and specifies what they can do with their property after the marriage.
Some states call a prenuptial agreement an "antenuptial agreement," while others call it a "premarital agreement." A contract made during the marriage is called a "postnuptial" agreement. A prenuptial agreement is also called an "antenuptial agreement."
Some people want a prenuptial agreement for the following reasons:
- Transfer separate property to children from previous marriages. To provide for their children when they die, a couple with children from prior marriages may use a prenuptial agreement to define what will happen to their property when they die. Without a prenuptial agreement, a surviving spouse may be entitled to claim a large portion of the other spouse's property, leaving a smaller inheritance for the children.
- Make sure financial responsibilities are clear. Families with or without children, whether wealthy or not, may wish to clarify their financial rights and responsibilities during marriage.
- This will minimize arguments in the event of a divorce. If they ever divorce, they may want to avoid potential arguments by specifying how their property will be divided and whether either spouse will receive alimony. Nevertheless, some states won't allow a spouse to give up alimony; in most others, a waiver of alimony will be scrutinized closely. It won't be enforced if a lawyer doesn't represent the spouse.)
- Protect yourself from debt. In addition to protecting spouses from debts, prenuptial agreements can address various other issues.
Weighing Your Options
The decision to get a prenuptial agreement put in place before a marriage can be an intimidating one. While it may seem as if those who get a prenup are giving up on their marriage before it even begins, having an agreement can provide several benefits. Here are several pros and cons to having a prenuptial agreement in place.
Pro: Protect What’s Important
A prenuptial agreement protects the assets that matter most to you. Many couples that go into marriage with a high number of assets or a significant net worth often have prenups put in place because they can better control who would receive what asset in the event of a divorce. A prenuptial agreement offers more excellent protection for assets you would like to maintain should the relationship end.
Pro: Protections for Children
One of the benefits of a prenuptial agreement is that children are often protected because of the document. In the event of a spouse’s untimely death, a prenuptial agreement allows children to be the beneficiaries of certain assets. Such a provision can also benefit children from a previous marriage.
Pro: Better for Businesses
For those who might own a business, a prenuptial agreement is a great option to protect those interests better. Business assets can be included in prenuptial agreements, so should the marriage end, you can breathe easier about the future of your business.
Pro: Prevent Debt From Transferring
Debt acquired during a marriage is often divided in a divorce, while debts acquired before marriage are not up for distribution. A prenuptial agreement can protect you or your spouse from certain debts that accrue throughout the relationship.
For example, you may have an agreement that student debt accrued due to one spouse going back to school is their responsibility should you divorce. A prenuptial agreement solidifies that agreement and prevents you from sharing some of that debt with the other spouse.
Con: Wondering if the Marriage Will Last
One of the drawbacks to a prenuptial agreement is the air of uncertainty that forms around the marriage. One of the schools of thought relating to prenups is that having one in place means someone isn’t confident that the relationship will last as long as the vows claim. For some, having this type of agreement before marriage could cause someone to wonder whether or not a member of the relationship is in it for the long haul.
Con: Ruins the Romance
Getting an agreement that dictates how assets will be divided if a marriage dissolves is hardly anyone’s idea of romance. Many share this sentiment; several people believe that a prenuptial agreement can damage the romantic side of a relationship.
Con: Creates a Sense of Distrust
Creating a prenuptial agreement is not an easy task. Discussions about finances and assets must occur, and those discussions can be filled with tension and hurt feelings. You and your spouse might disagree on how certain assets should be divided in the event of a divorce, and these disagreements can lead to feelings of mistrust.
For some, a prenuptial agreement could also cause feelings of distrust as it relates to the assets. One may wonder why the other spouse would go to such lengths to protect an asset.
These feelings have the potential to derail the marriage sooner than expected.
Ask an Attorney If a Prenuptial Agreement is Right For You
Determining whether or not a prenuptial agreement is right for you can be challenging and somewhat overwhelming. It is important to consider speaking to an attorney who understands how prenuptial agreements work and can guide you through making the best decision for you and your unique situation.
At Schipani, Norman & McLain, P.A., we understand that big decisions take thought, which is why we want to help. To speak with a member of our team, contact us at (941) 499-8154 or visit us online.