Let’s be blunt: If you own property or significant financial assets, would you go into a new marriage without some concern about losing it all in divorce? Nobody plans to get divorced, but the unhappy fact is that about 50 percent of all first marriages end up that way; and about 70 percent of second marriages. In today’s legal world, going to the alter without a signed prenuptial agreement just doesn’t make financial sense. That isn’t being cynical – that’s just being real. What was once the hallmark of high profile marriages between millionaires and celebrities is now more common than you might think, and more beneficial, as well.
First, what purpose does a prenuptial agreement serve?
Before you set out to create an agreement with your future partner it is always best to get a basic idea of what a prenuptial agreement can and can’t do. A prenuptial agreement by definition is a legal contract that is established by both parties prior to the marriage. It is a contract, of sorts, created in order to determine what will happen to assets that were held in individual ownership before the date of the marriage. Not only will they ensure that separate property remains separate, they also help to shorten the time that it takes to dissolve a marriage and makes dividing assets easier overall. A prenuptial agreement can’t, however, protect personal assets that have been mixed (commingled) with your spouse’s assets. In fact, when couples decide to mix their assets in order to invest in property or equities, extracting the original amounts provided by each party may prove impossible.
Second, what should your “bulletproof” prenuptial agreement include?
Prenuptial agreements aren’t all created equal. And they don’t all stand up in court. There are a few different things that you should keep in mind when creating an agreement. These different considerations are going to work to help make it harder to break the agreement by either party.
According to LawJournalNewsletter, some must-haves include:
- Separate Legal Counsel- if one spouse has money before the marriage, as is the case in many prenups, the spouse that is considered non-monied or without a large estate, should be represented by their own independent counsel. Both spouses should not have the same attorney as it is going to be a conflict of interest. It is best to have two different counselors that have the independent interests of their client in mind.
- Financial Disclosure- though you are not required by any law to tell your spouse where all your money comes from or what all of your assets are, it is always best to disclose enough that your spouse cannot claim deceit if you do get a divorce. The spouse with the most assets should take the time to outline enough of their assets that there is no way that the other spouse can claim that the assets were hidden.
- Maintenance Agreements- this means that the spouse with the most assets cannot simply dissolve the marriage without some sort of precedents in place. This means that there have to be boundaries, say for instance one spouse cheats on the other, this would be written into the agreement. In some cases, the agreement can be set aside and these terms should be outlined in detail.
- Alimony- you also want to address any alimony that might be paid after the marriage is dissolved. It should be known that there is no law that states that the spouse with less money has to have the same lifestyle that they had during marriage. This means that the spouse with the largest assets does not have to pay the other spouse to keep their old lifestyle.
- Waiver to Distribution of Wealth- it is also important to get a waiver of right to distribute wealth that was acquired during the marriage. The spouse that does not have a great deal of money needs to acknowledge that the spouse with the funds has that money and that they are likely to make more money during the marriage.
- Pre-nuptial agreements have no required time frame- a prenuptial agreement can be presented all the way up to the day before the wedding and still be valid but one cannot bully or threaten another person into signing it.
- Counsel Fee Waivers- the waiving of these fees is best held up when all of the possible concerns are taken care of out of court and are fully addressed in the agreement.
- Integration Clause- it is important to take the time to create a merger clause, this helps to negate any claims that other agreements were made at other times and in other places.
If time and careful attention is taken to the prenuptial agreement, it can be made to be bulletproof and to be impervious to any cracks or loopholes. With the proper attention, anyone can create an agreement that is going to hold up in court and that is going to stand up to the scrutiny of any lawyer.