Many people think that a prenuptial or post-nuptial agreement is for couples with significant wealth or who think their relationship will fail. For those unclear about the difference between the two agreements, a prenup is signed before marriage, while a post-nup is signed during the marriage. In either case, they are helpful to any couple regardless of wealth and what happens in the marriage.
Before we look at the benefits of a prenuptial agreement, I want to emphasize the importance of selecting the right process to use to create the agreement. Traditionally, one of the parties seeks the assistance of their attorney to draft the agreement, which would then be presented to the other party, who then retains his/her own attorney to review the agreement. Often this process is done within weeks of the planned wedding date. And, it is customary for this process to create a great deal of anxiety for the couple since there are often unspoken conditions and ideas included in the document.
Today, in our newly emerging legal cultures of Collaborative Practice and/or Mediation, couples can actually discuss the ideas that they will be committing to before their document is drafted. This joint effort produces a document that both parties have jointly created from their shared interests, which is certainly, a more positive approach and precedent for their future life commitments.
As you contemplate the idea of a prenup or post-nup, consider these benefits:
- Encourages financial discussions and disclosure. Money is a common cause of marital disputes sometimes even leading to divorce. With couples marrying later in life, this has become even more important since the parties may have already accumulated significant income and assets as well as debt from school loans and credit cards. The best way to avoid financial disputes is to have open and honest discussions about your assets, debts, values about money, and expectations in marriage. How will you deal with your separate and joint finances? Are you a spender or a saver? What kind of lifestyle do you expect to have, including having children and taking time off from work? These answers are crucial to the future of the marriage particularly when there is a big income, asset or debt disparity between the couple. A prenup/post-nup forces you to have these conversations and make decisions that you put in writing.
- Protects children from a prior marriage. Second marriages are common. A prenup/post-nup allows the parties to establish how they will leave their assets in the event of death. This is especially beneficial if there are children from a prior marriage and the parent wants to protect their inheritance, while also ensuring the surviving spouse is supported. Many people are not aware that in the absence of a prenup/post-nup, a spouse has a legal right to a share of the deceased spouse’s estate even if the will says otherwise. Note that a party can also use a prenuptial or post-nuptial agreement to leave assets to other parties beside children.
- Plans for separation or divorce. While no one wants a marriage to fail, it is important to consider how you want to divide your assets and debt and deal with spousal support in the event of separation or divorce. The best time to do that is before a problem arises and when you are still committed to each other. It is much easier to come to an agreement when you are not dealing with the negative emotions and stress of marital problems.
- Preserves marriage. The process of entering into a prenuptial or post-nuptial agreement can strengthen a couple’s relationship and marriage. If done properly, the couple can have honest conversations, deal with each other respectfully, and have a better chance of solving their financial or other issues before their differences become unmanageable.
If you are considering a prenuptial or post-nuptial agreement, contact me for a consultation.