Prenuptial Agreements
Many individuals nervously contact me before their wedding date to ask about a “prenup” agreement. They might have been advised by a family member or a friend to investigate signing a prenuptial agreement, but aren’t sure whether or not they need one. Even if the person knows that they should have an agreement drawn up, they are concerned about the emotional ramifications of approaching their soon-to-be spouse and his or her family about it.
What is a Prenuptial Agreement?
As I wrote in a previous blog post, a prenuptial or premarital agreement is a contract between two people who are to be married. A “prenup” typically spells out not only what an individual owns, but also, what that person owes and what their property and maintenance (alimony) rights will be in the event of death or divorce. Many people assume that a prenup can mean lack of trust on one or both parties’ part and it is thought to be a forerunner to divorce. In order to dispel that myth, let’s discuss some of the benefits of having a prenup, when you should consider having one and how to approach it with your future mate.
Benefits of a Prenup:
- Defining all property as either separate or marital;
- Determining ones right or obligation regarding maintenance; and
- Influencing trusts and wills.
Prenuptial agreements can protect the assets and income of both parties entering into a marriage, It has benefits to those with a high net worth and also to those whose portfolio or assets are of lesser value.
When You Should Consider a Prenup:
In my opinion, there are many times when you should seriously considering have a prenuptial agreement drawn up for you before you get married. Among those times are:
- When one partner is entering into the marriage with assets he/she wants to protect in case a divorce does occur.
- When there is a remarriage. When entering into a subsequent marriage, the financial and legal conditions may be different from the previous marriage. We consider if there is child support, alimony or other assets from the other marriage.
- When one fiancé has a lot of debt. If your partner has a lot of financial debt, you do not want to be responsible for it down the road, if you should get divorced.
- When there is a business involved. When one partner owns a part or whole business, stipulations should be provided for that business.
How Do I Approach My Future Mate about a Prenup?
- Have the conversation early. Don’t wait until the week before the wedding.
- Approach the topic as a joint financial protection for both of you. No one knows what the future holds for either of you – there are economic downturns, promotions, surprise inheritances, etc.
- Make sure you both hire experienced divorce lawyers.
A well-prepared prenuptial agreement has many benefits. Entering into a marriage with a prenup in place can protect the assets of both partners. If you are contemplating a prenuptial agreement and live in the Chicagoland area, feel free to contact me to discuss the pros and cons, help you write a prenup, or even look over an existing one.
