Do I need a prenuptial agreement (prenup)?
Most people don’t enter a marriage with plans for divorce. By the same token, no one enters a vehicle with plans for a major accident. But you still wear your seatbelt because you want to be prepared should the worst happen.
Prenuptial agreements are just that – a plan put in place should you be faced with the unexpected.
Why get a prenup?
Setting up a prenuptial agreement before marriage has several advantages. Among them, it will save you money, should your marriage end in divorce. It will define and protect property that is separately yours, and reduce conflicts by establishing and clarifying any special ground rules.
Furthermore, these arrangements are made when the relationship in question is in a positive place. It is far easier to do so when “cooler heads prevail” as opposed to trying to muddle through the division of assets while in the midst of a divorce.
Often, my clients come into my office with some misconceptions about prenuptial agreements. The term generally has some negative connotations. I hope I can dispel some of the myths surrounding prenuptial agreements for you.
MYTH 1: PRENUPS ARE ONLY FOR THE RICH AND FAMOUS
It is a common misconception that prenups are only for rich celebrities and moguls — those with the most to lose in case of a divorce. Today, this is absolutely not the case. While the stakes may not be quite as high for those of us who are not blessed with massive fame and fortune, thousands of dollars are sure to be at risk without a preemptive determination of marital rights.
You may not have a lot of assets now, but if you start a successful business, inherit a substantial amount of property, or make capital gains on property you own in the future, it is important to ensure that your rights and your spouse’s rights to those assets is clear cut. Furthermore, if you your assets are on the more modest side, it becomes even more important to protect what you have.
MYTH 2: PRENUPS MEAN YOU ARE ALREADY PLANNING FOR A DIVORCE AT THE BEGINNING OF YOUR MARRIAGE
Another misconception is that getting a prenup means that you assume your marriage is headed for divorce. This is simply not the case. Presently, the national divorce rate hovers around 50%, with local averages varying depending on where you are. In Orange County, CA for example, the divorce rate is unfortunately around 70%. Simply put, if you think you will never get divorced for one reason or another, you are betting against the odds. Of course, most of these people enter their marriage assuming it will last despite the likelihood of it ending in divorce.
The most overlooked and most important benefit of a premarital agreement is that the couple must discuss the entirety of their assets and plan out their future together now while they are most in love. Each party embarks on the journey of marriage knowing everything about the other: credit, debts, assets, inheritance, and more. Additionally, the parties will be forced to communicate about difficult topics before they enter into the marital union. It’s a great opportunity to make sure that each person is on the same page on a number of important issues.
Aside from alcoholism and infidelity, the main cause of divorce is that couples go into the union with wildly different expectations regarding the use of assets, the accumulation of assets and debts, and marital roles. Discussing these issues up front eliminates a future need to enter into a drawn out legal battle if there should be a parting of ways.
MYTH 3: A PRENUP IS NOT ROMANTIC
What is more romantic than telling the person you love that you do not care about their money, their job, their inheritance; you love them for who they are so much so that you would sign a prenup?
A prenup simply determines the characterization for assets and obligations brought into the marriage and acquired during the marriage.
The process of drafting one does much more in terms of ensuring a full disclosure of assets, discussion with regard to who will be the breadwinner, who will continue to work after the birth of children, and more.
MYTH 4: A PRENUP ONLY PROTECTS THE WEALTHIER PARTY WHILE STRIPPING THEIR SPOUSE OF ANY RIGHTS
A properly written premarital agreement will be agreed upon by both parties when it is signed and implemented. The presumption, therefore, is that if both parties have agreed to it, both parties have found it to be fair and impartial. Their purpose is to protect everyone involved and not favor one spouse over the other.
Moreover, having a prenup actually increases the likelihood that any post-divorce arrangements are fair for both parties. If during the time of a divorce, you are forced to leave issues such as spousal support up to the courts, you may find yourself with terms that are far less fair. If couples make these arrangements ahead of time, then the agreement they have both drawn up and agreed upon together is the one that will be implemented in the event of a divorce.
Furthermore, any prenup which blatantly favors one partner over the other may not even be enforceable. In order to be enforceable, a prenuptial agreement must be fair to each party, voluntary, and be made based on the full disclosure of each spouse’s full disclosure of their assets and debts. A good attorney will ensure that this is the case.
MYTH 5: IF YOU STICK TO BEING A COMMON-LAW COUPLE AND DON’T ACTUALLY GET MARRIED, YOUR SPOUSE WON’T HAVE ANY LEGAL CLAIMS TO YOUR ASSETS
This is simply not true. Without a prenup, common-law couples may find themselves having the courts arrange for alimony – spousal support for couples who are cohabitating but are not married. Moreover, if, during your relationship, you have a discussion regarding the division of resources and any arrangements you’d like in place should you divorce, you risk this verbal “agreement” being upheld in the courts regardless of whether or not one party agrees to its validity. There have been common-law separation cases where real estate is forcibly sold at auction and assets divided – a situation you would most certainly not want to find yourself in.
Again, as with any marriage, a prenuptial agreement will prevent any unforeseen arrangements and asset allocations made by the courts in the event of a common-law separation.
MYTH 6: PRENUPTIAL AGREEMENTS ARE EXPENSIVE
When compared to the potential cost of a long, drawn out divorce, the cost of a prenup is quite reasonable. A prenup will help avoid common struggles divorcing couples experience. There is no squabbling over assets or children, spousal support or child support, as these arrangements will already have been made. While ensuring that your assets are protected, a prenup will also afford you peace of mind should your marriage end in divorce.
MYTH 7: PRENUPTIAL AGREEMENTS ARE NOT UPHELD BY THE COURTS
It is rare for a well-written prenup not to be upheld by the courts. There are very strict rules and guidelines in place that must be followed when drawing up a legitimate prenuptial agreement and if they are not followed, you risk the possibility of the prenup not being upheld.
This is why consulting with a competent family law attorney is so important in these matters. You want to ensure that your prenup has the best chance of being enforced in the event of a divorce.
Another scenario where a prenup may not be upheld in the court of law is if one party exerts coercion on the other. It may also – at the very least – be challenged by one of the two parties if the divorce is particularly contentious. However, if the agreement is upheld, the entire divorce process will most certainly be simpler than if there been no prenup in place to begin with.
Discussing all issues in the beginning is a prudent idea for any couple thinking of entering into a marriage. Let The Hills Law Group do the heavy lifting while you tie the knot.
For any additional questions you may have, please use the email addresses listed below. The world of prenups can be confusing and we want to be as helpful as possible.
For pre-sale questions, consulting with our team is the best way to go so that, together, we can decide which service is most appropriate for you.
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