Prenuptial agreements have become increasingly common in American marriages. Nowadays, most couples understand the practical benefits for both spouses that a prenup can provide. Prenups enable couples entering a marriage to define and categorize assets, financials, and other future concerns.
While you and your fiancé are planning for your financial future, here are some things you should know about prenups:
What is a Prenuptial Agreement?
A prenup is a legal document that engaged couples sign prior to getting married, which sets forth their formal agreement on the division of assets and obligations in the event of a divorce or death of a spouse. The prenup states how financial assets such as real estate, businesses, stocks, bonds, and other investments, personal property, debts, and non-financial assets would be divided.
A prenup is recommended when one person in the relationship has more at stake financially or otherwise, than the other, or if one partner has children from a prior marriage. If you live in a state where you’re concerned about a fair settlement in a divorce case in your situation, a prenup is advised.
States have their own laws on the legal status and enforceability of prenups. Either the state in which the couple married or the one in which the couple lives during their marriage is the one that may be involved in determining how the terms of the prenup will ultimately be settled.
What You Should Know About Prenuptial Agreements
1. The Agreement Must be Fair
Most states in the U.S., require that a prenuptial agreement is fair to both parties. Generally, this means that each of the parties needs his/her own attorney, that both parties fully disclose their assets, and that the unique circumstances in which the couple is making the agreement are fully considered. The agreement also contemplates what will be fair in the future, after years of marriage. For example, it may consider the lifestyle the parties have developed and to which they’ve grown accustomed, or additional burdens one party may incur due to a divorce.
2. Full Disclosure By Both People is Required
Both parties must fully disclose all their investments, real and personal property, and other financial assets. They’re also required to disclose all debts and financial liabilities. Some states take into consideration any future inheritances that either party may receive, and may require that those possible future gains be included in the prenuptial agreement.
3. Premarital Assets are Normally Excluded
Typically, a prenup stipulated that assets a party brings into the marriage will remain the separate property of that individual. The prenup can state that assets acquired during the term of the marriage are subject to being divided in the event of divorce. Couples usually find this to be a fair way to approach a prenup, although the agreement can be shaped to fit a couple’s particular needs and interests.
4. Things You May Not Know You Can Put in a Prenup
Genetic material, like stored embryos, eggs or sperm can be included in a prenup. Intellectual property, such as business ideas, inventions, literary works, artistic works, copyrights, names, symbols, and images used for commercial purposes also can be protected under a prenup. Pets can be included in the agreement. Sentimental items that may have more nostalgic than monetary value, like souvenirs or holiday décor, even sex toys can be included. Outsourced workers, such as housekeepers, financial advisors, and others can be included, if those people wish to continue after divorce.
5. You Each Need Your Own Attorney
Each partner needs his or her own attorney to represent them in helping create the prenuptial agreement. Having separate attorneys is actually required for prenups in some states. An attorney can only represent one client. Therefore, working with only one attorney can put the validity of the agreement in question and its enforcement at risk, because one of the parties was not properly legally represented.
6. Alimony Terms are Normally Not Addressed
Typically, alimony is not mentioned in prenups. However, in some states, rights to alimony can be waived under a prenup agreement. When alimony is waived, a party cannot seek alimony as part of the settlement or judgment in a divorce. Not addressing the question of potential alimony in the prenup leaves the issue to be resolved by the parties or by a court in the event of divorce.
7. What a Prenup Cannot Do
There are limits on what a prenup can include. For example, a prenup cannot create a child custody, child visitation, or child support agreement. It cannot stipulate the religion that children will be taught, or the amount of household maintenance to be paid by parties in a separation. A prenup also cannot set terms for a divorce. For example, a prenup cannot stipulate that if one spouse is found gambling, the other spouse is entitled to a divorce.
8. You Should Have the Prenup Done Well in Advance
Discuss your preference to have a prenup with your partner well in advance of your wedding day. Waiting until a few days, or even weeks, prior to getting married is a poor idea. In fact, a prenup signed during that stage of engagement, so close to the wedding date, can be overturned in some states. You should allow your partner plenty of time to process the idea of a prenup, discuss it multiple times with you, and to work with his or her own attorney on the idea, prior to signing.
9. The Cost for a Prenup
If both your fiancé’s and your own finances are simple enough, you may be able to do an adequate job on your own, with a generic DIY prenup agreement. If either of you have slightly more complex finances, including investments, a business, children from a previous marriage, partnership in a business, or other more involved considerations, you should have your prenuptial agreement professionally written by an experienced prenup attorney. Preparing a prenup can be expected to cost an average of $1,200 to $2,400.
10. Can a Prenup be Changed
Yes. Your prenup can be changed at any time throughout your marriage, as long as both you and your spouse agree to the modification(s). You can even have a timer built into your prenup that specifies a number of years that the agreement will stay in effect as it is. That way, you and your spouse are prompted to revisit the agreement, as that date approaches, and make any revisions that the two of you may decide to include.
Get Advice from a Prenup Lawyer
More and more millennials are taking the step of having a prenup written as part of their future planning. Many are waiting until later ages to marry, which means they’ve got more wealth by the time they wed. In other cases, one spouse may plan to postpone career plans in order to stay home and raise children while the other pursues a career. In these kinds of cases a prenup becomes especially important.
Postnup: A postnup is typically available for already-married couples, and it can be written with the same kinds of inclusions and is subject to the same limitations as a prenup.
Daniele Johnson & Associates, Atlanta GA
We are a family law practice in Atlanta, Georgia. We specialize in divorce, child custody, child visitation, child support, alimony, and other family legal matters. We help responsible couples create prenuptial agreements that can help them start their lives together with greater security.