You can’t predict the future. The hard truth is that the way you feel about your partner today may not be the way you feel as life evolves. Marriage is wonderful. Marriage is difficult. That is why it is so important to have level-headed discussions about what might happen if your feelings change in the future now, when you are sitting on the same side of the table and both truly want what is best for each other.
Enter The Prenup
If you are getting married, or re-married in the near future, you should be thinking about a prenuptial agreement. While it is important to protect each spouse, the best reason to enter into a prenuptial/premarital agreement, is to foster healthy communications about your finances from the beginning to prevent going through a divorce in the end.
A prenup is a contract entered into prior to marriage. The content of a prenuptial agreement can vary widely, but it commonly includes provisions for spousal support and division of assets in divorce. This type of agreement works well regardless if this is your first or fifth marriage. And it is not only for the rich and famous. Everyone has something worth protecting. Prenups give guidance as to what happens to property, debt, future inheritances and earnings. Though there are ways to keep assets separate without prenuptial agreements, the marital water can get really muddy, really fast. And while a couple preparing to walk down the aisle has no intention of ever divorcing, statistics tell us it’s the reality that counts.
Common Issues Prenuptial Agreements Address
- Ownership and use of property upon divorce
- Division of assets in divorce
- Allocation of debt upon divorce
- Amount and duration of maintenance/alimony payments upon divorce
- Obligations to create a trust or will to address distribution of assets on death
- Which state's law will apply to the agreement in case of a disagreement
A prenup cannot address the allocation of parental responsibilities, parenting time or amount of child support that will be paid as the right to receive child support belongs to the child and parenting decisions must be based on the best interest of any children at the time of a divorce. But most of the other financial aspects can be covered. It’s important to know that spouses can amend or revoke their prenuptial agreement at any time after they are married. This is particularly important now as the tax rules for deductibility of alimony are changing in 2019 and existing prenups and postnups may have unintended consequences. It’s also important to understand that prenups are not guaranteed to be enforced and may be discarded by the courts if they are signed under duress or don’t meet certain requirements so it’s critical to have an experienced attorney draft them.
A Postnup Might Even Save A Marriage
What happens if you are already married? Are you out of luck? No – definitely not! You and your spouse can enter into a postnuptial agreement. A postnup is an effective way to document intentions for earnings and assets during the marriage as well as in the event of a future divorce. Postnups are typically used either early in the marriage when the couple didn’t have time to finalize a prenup before the wedding, or five, ten or more years into a marriage when the couple is aware of issues that threaten their relationship and want to gain clarity on areas of conflict. This is evident when looking at the divorce proceedings of Matt Lauer and Annette Roque.
Reports stating Lauer and Roque are close to finalizing their relatively drama-free divorce attribute the smoother sailing to the 2006 postnuptial agreement signed by the couple. Given the explosive allegations and public downfall of Lauer, their divorce had the potential to be brutal. While it is certain that remaining details will be hammered out, the majority of the financial negotiations were addressed in the document – which was signed eight years after they were married. Having a legally binding document in place has allowed them to keep their divorce relatively private and moving along quickly.
Protecting Your Love And Yourself - That’s A Good Thing
Prenuptial and postnuptial agreements are often maligned and get a really bad rap. The reality is they are simply misunderstood. They are a wonderful way to protect each other from potentially making decisions in the future from a place of anger and resentment. When you are crazy in love, the very last thing you want to be thinking about is what would happen if that went away. The flip side of that coin is People and emotions naturally evolve over time. If you and your spouse evolve in the same manner or you can work together to create a happy medium, you won’t ever need to implement your prenup or postnup. Just like buying homeowner’s insurance to protect you financially if your house burns down, you hope you never need it.
Is prenuptial/postnuptial "insurance" appropriate for your relationship to do everything you can to protect your marriage for better and for worse?