A Prenuptial Agreement Defined
Prenuptial agreements, also referred to as premarital agreements, or, in slang “prenups,” are legally binding contracts. The purpose of prenuptial agreements is to outline the intention of the engaged couple, prior to marriage, regarding the division of property and debts, and the assignment of alimony and support.
Talking About a Prenuptial Agreement Can Improve Your Relationship
There are many benefits to discussing a prenuptial agreement before marriage. As a preliminary matter, far too many couples don’t talk about money prior to marriage. According to some experts, a failure to communicate about financial issues is a leading reason couples divorce. Discussing a prenuptial agreement forces couples to explore their attitudes about money. This includes whether the couple expects to maintain separate accounts, merge their accounts, or some hybrid of both separate and merged accounts. It is also an opportunity to discuss expectations about the potential fair division of assets, should the marriage fail.
A Prenuptial Agreement Can Provide Peace of Mind for the Family Business
Many people who own part of a family business enter into a prenuptial agreement with their partner. With such an agreement, the family doesn’t have to worry about losing the business in the divorce. In addition to potentially losing the business, a divorce could result in splitting the business. A properly written prenuptial agreement prevents this from happening, bringing peace of mind to the family.
A Prenuptial Agreement Can Protect the Financial Stability of Adult Children
Remarriage and blended families are becoming more commonplace all the time. Additionally, remarriage late in life is increasing in popularity. When couples enter into a prenuptial agreement, this frequently eases the mind of the adult children of the parties. A premarital agreement clearly delineates who inherits property owned by each spouse. Prenuptial agreements are legal contracts which trump the ordinary rights of inheritance. This secures the financial stability of your children.
A Prenuptial Agreement Can Save You A Fortune
As experienced divorce lawyers, we know prenuptial agreements created while you are both in love and want happiness for each other costs significantly less than an ugly divorce. While it isn’t common, a particularly ugly divorce costs tens of thousands of dollars. A prenuptial agreement addresses almost all the issues couples address when facing a divorce. While child custody remains an issue during dissolution proceedings, the prenuptial agreement addresses the other issues of divorce, including property and debt division, alimony and the like. If you have a valid prenuptial agreement in place, this significantly reduces the cost of your divorce proceedings, as the lawyers have already addressed the majority of the issues.
A Prenuptial Agreement Reduces Hostility
While conscious uncoupling is all the rage, many divorces come with a certain amount of resentment and hostility. The hurt and confusion accompanying many divorce proceedings often leads to petty arguments in an attempt to hurt the other party. Because a prenuptial agreement clearly lays out division of property, the rights and responsibilities of alimony, and debt allocation, divorcing couples have little to any opportunity to engage in disagreements out of hurt or disappointment, or a desire to punish the other party.
People Who Should Consider Prenuptial Agreements
- People who wish to leave property or assets to someone other than their spouse;
- Owners of real estate;
- Couples where one party plans to attend graduate school while the other works;
- People who have more than $50,000 in assets;
- Earners of more than $75,000 per year;
- Employees who receive stock options and/or profit sharing from their company;
- Business owners;
- Employees who have garnered more than a year of retirement benefits;
- Workers who have a deferred compensation account.
Even if you or your partner doesn’t fit into one of these categories, having a prenuptial agreement may be in your best interests.
Why a Prenuptial Agreement is Different than a Will
Perhaps you and your partner have decided you will both split your assets in your wills. A prenuptial agreement is a different tool than a will. Prenuptial agreements are contracts between the parties. Parties are legally permitted to change their wills unilaterally. Changing a will does not require the knowledge or consent of the other spouse. A surviving spouse can also change their will after the other spouse dies. To assure yourselves your joint desires – as they stand today – are carried out, a prenuptial agreement achieves the goal. Like wills, prenuptial agreements are modifiable. However, prenuptial agreements require the consent of both parties to change the terms and conditions of the agreement. (This is not to say you shouldn’t have a will, of course. Simply understand it has a slightly different purpose.)
Prenuptial Agreements and Death
While only 50 percent of marriages end in divorce, of those remaining intact, 100 percent end in death. Having a prenuptial agreement provides confidence for all involved about the division of assets upon the death of one of the parties to the marriage. This not only provides peace of mind to adult children, and members of a family business, it provides peace of mind to the parties themselves.
Best Laid Plans: If You Meant to Secure a Prenuptial Agreement Before Marriage, But Didn’t
If you meant to draw up a prenuptial agreement, but got distracted by all the wedding planning, and the rest of your life, it’s not too late. Under the laws of the state of Maryland, creating a postnuptial agreement between you and your spouse is permitted. Just like with a prenuptial agreement, our lawyers draw up a contract addressing property, debts, retirement accounts, alimony and support, and other issues.
If You Are Considering Marriage
If you are considering marriage, consider entering into a prenuptial agreement. This protects you and your beloved from unforeseen circumstances in the future. Contact the Family Law Attorneys at Fait & DiLima to discuss your family law needs. We have offices in Rockville and Fredrick to serve your needs.