How to Decide If You Need a Prenuptial Agreement
You found the person you think might be the one, and you’re ready to tie the knot. But amid plans for a beautiful cake and reception, should you consider more practical matters like a prenuptial agreement?
A “prenup” is a written contract that both sides have agreed upon. It’s drawn up by a family attorney to designate where each party’s assets fall, should the marriage end in divorce.
“Prenuptial agreements cover how a couple splits their finances, what each party’s separate property is (what they come into the marriage with) and how they would split their home,” explains Sandra Schpoont, a family and matrimonial specialist. “It can delineate how they’d divide up marital property, including marital debt — so what they have, but also what they owe — and it can also state how long a spouse or children can stay in a marital home during a divorce.”
Contrary to popular belief, prenups are not only useful for wealthy people. They also get a bad rap sometimes because they seem like a harbinger of divorce, but that’s not necessarily the case.
Don’t be quick to dismiss this document. There are many reasons you might want to have a prenuptial agreement. We’ll look at both sides of the issue so you can decide if it’s the right choice for you.
When You Should Consider a Prenup
Though anyone can design a prenuptial agreement, it’s more feasible and practical in some instances than others. If you fall into any of the following categories, you’ll probably want to consult a family law attorney about your options for protecting individual assets.
One person is wealthier than the other. That individual may wish to protect his or her assets in the event of a divorce. It’s more of a business decision than a personal one.
One person has a lot of debt. You don’t want to be in a position where your spouse divorces you, and you get stuck with half of his or her debt load.
Both parties plan to keep their finances separate. If the couple wants to maintain independent finances after marriage, it’s a good idea to get that protection in writing.
The parties have been married before. Previous marriages may involve a variety of liabilities, such as child support or split assets. Those can affect the way assets are split if the current marriage ends in divorce, unless the prenup designates otherwise.
They have children at the time of marriage. You should make it clear what portion of your assets you want to be allotted to your children in the event of a divorce.
One party is a citizen of another country. Different rules govern the division of assets and custody rights in different countries. Marrying someone from another country could leave you vulnerable if the marriage doesn’t survive.
Pros and Cons of a Prenup
The decision about whether to get a prenup can entail various pros and cons. Below are some major ones.
Pro: You’re prepared in the event of the unthinkable.
No one should walk into marriage thinking he or she might get divorced, but it’s wise to be prepared, anyway. The projected divorce rate is fairly high — between 40 and 50 percent of couples eventually get divorced — although this number can be misleading.
The University of Denver’s Scott Stanley explains that the percentage should be regarded as more of a helpful projection to help married couples get an idea of their odds. He says:
“The 40-50% number comes from a detailed analysis of various population demographics, including ages, life span projections, etc. It represents a sophisticated projection of a calculated risk, much like projected life span for babies born today. . . . [It] is a valid projection under current conditions and it pertains to new, first time marriages.”
These numbers are useful when you’re considering a prenuptial agreement. They underscore the wisdom of being prepared. You might never believe that your spouse would cheat on you, or grow into a different person ten years down the road, but both are possibilities, and it’s best to be prepared, just in case.
Con: Prenups make it easier to walk out of a marriage.
Divorce is often messy, especially if there’s substantial money and other assets. It’s expensive, time-consuming, and difficult.
The difficulty can encourage couples to keep working on their marriage, and attaining success. Tamara Shayne Kagel, a lawyer and writer for Huffington Post puts it this way:
“I would never want it to be easy to walk away from my marriage. I want it to be hard because one day being married and staying happily married is going to be hard, even for the most perfect of couples. While my current wedded bliss seems worlds away from such things, I recognize it’s possible I could feel resentment or hatred or bitterness, 10, 20, 30 years down the line. And if/when I feel those things, I don’t want to be looking at divorce as an easy alternative where I know I’ll be taken care of and can quickly find happiness on my own. I want it to look equally horrible to what I’m feeling so I remind myself that the better alternative is to do the hard work of bringing myself closer to my spouse.”
So, a prenup isn’t necessarily a precursor to divorce, but it can make it seem easier to go your separate ways.
Pro: The divorce process becomes much simpler.
On the other hand, if you get to the point where your problems can’t be worked out, and it might be better for the parties to separate, a prenuptial agreement makes this much easier. All the provisions are clearly laid out, in a legally binding document, and no one can disagree with that sheet of paper.
In addition, you’re guaranteed to keep your assets. According to a 2010 Harris Interactive poll composed of more than 2,300 divorced Americans, 15 percent deeply regretted not signing a prenup in advance.
The divorce process without a prenup can be messy, as shown by dozens of celebrities and wealthy individuals. For example, Heather Mills, who was married to Paul McCartney, was awarded almost $50 million of McCartney’s money when the marriage ended because there was no prenup in force.
Another example is Michael Jordon, who paid Juanita Vanoy a whopping $168 million at the end of their marriage because there was nothing to protect his assets. A divorce is much simpler and safer when a prenup exists.
Contact Rowdy Williams to Discuss Your Prenup Options
Whether you’re leaning in favor of a prenuptial agreement or not, it’s good to talk to a family law attorney about it. The decision depends entirely on the people involved, and options and recommendations will be unique to your circumstances.
At the law offices of Rowdy Williams, we can guide you through the options. We’ll look over your assets and finances and determine whether it would be smart and viable to draft a prenup. We can show you our risk assessment and share some industry wisdom on the subject.
To schedule an appointment, contact our law offices today!