Should You Get a Prenup?
Many couples who are engaged to be married entertain the idea of getting a prenuptial agreement. There is certainly a societal stigma attached to premarital agreements. There’s the feeling that you’re already prepping for the inevitable dissolution of the marriage. But there are many advantages to formalizing a prenuptial agreement that can make it a valuable tool that doesn’t necessarily have to spell misgivings or doubt.
Consider life and health insurance. Ideally you and your family won’t need to use your health or life insurance, but should the unforeseen occur everyone is relieved to have the protection.
Before you make a decision though, it’s important to understand exactly what a prenup can and can’t do for you.
Do you have children from a previous marriage?
Prenups are an effective way to ensure any children or grandchildren from a previous marriage can maintain their inheritance rights.
At the same time, this could have negative ramifications for the new spouse, as they and their children may not receive the inheritance to which they may feel entitled.
Do you own your own business?
Some of the most contentious disputes during high-net-worth divorces concern with business interests owned. Typically, most divorcing couples have no desire to continue working together or to have a spouse be in a position to interfere with the running of the business.
A premarital agreement can protect that business from being divided during divorce proceedings, and can be used to ensure a former spouse isn’t entitled to any further involvement.
There is also an argument against drafting a prenup, if the non-owner spouse has contributed significantly to the business’s growth during the marriage. This applies even if a spouse was running a household that gave the other spouse the necessary time to grow the business. Signing a prenup that dictates one partner or the other receives all or majority ownership of a business following a divorce could prevent the spouse from receiving the benefits to which they may be legitimately entitled.
Do either of you have a significant amount of debt?
There are certainly many scenarios where two people, one of whom has extensive debt, decide to get married. A prenup can protect the debt-free party from having to assume the debt burden should they decide to divorce in the future.
Is getting married going to affect your earnings potential?
Marriage can change your entire life trajectory. Many people give up lucrative careers in order to start a family when they decide to get married. Maybe one income is enough to sustain that family, but should the couple decide to get divorced in the future, the spouse who abandoned their career may discover a challenge in trying to secure comparable employment.
A prenup may benefit people in this situation because they can be appropriately compensated for the opportunity they abandoned to get married.
Conversely, a prenup can also be used to limit the amount of spousal support one spouse will be required to pay to the other spouse, which could be a negative for the non-wage earner in the relationship.
Does the stigma concern you and your future spouse?
There are a lot of people who just can’t get over the fact that they’re drafting a contract that is setting out the terms for divorce. It’s often especially hard to think about during the months leading up to marriage, where couples are generally still infatuated with each other to the point where they can’t imagine ever getting divorced.
Whether you’ve already decided you want a premarital agreement, or you and your future spouse just want to speak with an attorney about what it may entail, please contact Conniff & Keleher, LLC today.