The Last Fling Before the Ring?
Premarital, prenuptial, or any other word you want to use — they all mean the same thing. As the new year begins, those couples who experienced engagements and happily ever after moments start ramping up their planning and making waves about the “big day.” As a family law attorney, one piece of important information that is often overlooked during the excitement is the one about protecting assets and planning for the future!
Often during the planning process, people can get scared or uneasy when one party brings up the thought of having to sign a prenuptial agreement. But I’m here to tell you that there’s no reason to be scared. These types of agreements are often a protection to both parties and can help put parameters in place should a separation and divorce arise in the future, which can save both people time and money in the long run.
So, what are these agreements we often hear about right before the big wedding day and why should you consider one? Prenuptial agreements can include lots of things, but perhaps most importantly they often include provisions that protect your current assets and ensure you can keep those things you entered the marriage with as your own, even if you and your significant other separate later. The family law arena is rarely black and white, but you can control what is considered “marital” property and what is not to some degree by defining those things that both spouses bring into the marriage, what happens if you use those separate things during the marriage, and what happens to those things in the event of a separation and divorce in the future. Those things can include retirement accounts, investments, businesses, personal property, real estate, and other potential rights.
Prenuptial agreements can also dictate how “marital” property or accounts will be divided should you separate. Marital property is defined by state law and each state differs somewhat is how marital property is defined, so it is important to talk with a family law attorney to make sure you understand the ins and outs. There are more advantages to a prenuptial agreement than most people realize. For example, let’s say you marry and live in a state that defines marital property as anything you acquire from marriage to separation and it is equally divided 50/50 at the time of divorce; but 10 years from now you relocate with your spouse to a state that defines marital property by some other definition that may not be favorable to one of you—such as a car or your house, in which the equity value could be divided between the two of you. Your prenuptial agreement could override state law where you are divorcing due to definitions and already predetermined distribution factors that you and your spouse agreed upon—years ago—while you really liked each other and were clear-headed enough to enter into a well-thought out and considered agreement.
It is important to remember that prenuptial agreements cannot just be a verbal agreement to each other that you expect the other spouse to uphold later when things are not as sweet between the two of you. They must be made in writing, executed according to the requirements of the state, and a full financial disclosure of both spouses is usually required. It’s generally recommended, and possibly even required depending on the state, for each person to have their own attorney to ensure the agreement is voluntarily executed and agreed upon.
Entering into a prenuptial agreement also encourages couples to have the sometimes uncomfortable conversations about finances and their goals for the future. Finding out today what goals you and your spouse share (or don’t share) will help ensure you are beginning your chapter as a married couple on the same page.
Just as important as your wedding day—is your personal financial protection! Talk with a family law attorney before tying the knot so you can lay the foundation for a strong future regardless of what lies ahead.