Pros and Cons: Premarital Agreements ("Prenuptials")
The truth is, marriage is not only a romantic relationship, but also a sort of business relationship. This dual nature and purpose of marriage has led to the increased acknowledgment that a prenuptial agreement (also called a premarital agreement or prenup, for short) can be useful to protect each spouse's financial interests. Let's take a look at the pros and cons of entering into a valid prenuptial agreement based on your state's laws.
- A premarital agreement can protect the inheritance rights of children and grandchildren from a previous marriage.
- If you have your own business or professional practice, a premarital agreement can protect that interest so that the business or practice is not divided and subject to the control or involvement of your former spouse upon divorce.
- If one spouse has significantly more debt than the other, a premarital agreement can protect the debt-free spouse from having to assume the obligations of the other.
- If you plan to give up a lucrative career after the marriage, a premarital agreement can ensure that you will be compensated for that sacrifice if the marriage does not last.
- A premarital agreement can address more than the financial aspects of marriage, and can cover any of the details of decision-making and responsibility sharing to which the parties agree in advance.
- A premarital agreement can limit the amount of spousal support that one spouse will have to pay the other upon divorce.
- A premarital agreement can protect the financial interests of older persons, persons who are entering into second or subsequent marriages, and persons with substantial wealth.
- The agreement may require you to give up your right to inherit from your spouse's estate when he or she dies. Under the law, you are entitled to a portion of the estate even if your spouse does not include such a provision in his or her will.
- If you contribute to the continuing success and growth of your spouse's business or professional practice by entertaining clients or taking care of the home, you may not be entitled to claim a share of the increase in value if you agree otherwise in a premarital agreement. Under the laws of many states, this increase in value would be considered divisible marital property.
- Starting a relationship with a contract that sets forth the particulars of what will happen upon death or divorce can engender a sense of lack of trust.
- It can be difficult to project into the future about how potential issues should be handled, and what may seem like an inconsequential compromise in the romantic premarital period may seem more monumental and burdensome later on.
- A low- or non-wage-earning spouse may not be able to sustain the lifestyle to which he or she has become accustomed during the marriage if the agreement substantially limits the amount of spousal support to which that spouse is entitled.
- In the "honeymoon" stage of a relationship, one spouse may agree to terms that are not in his or her best interests because he or she is "too in love" to be concerned about the financial aspects and can't imagine the union coming to an untimely end.
Is a Prenup Right for You? Get Professional Legal Assistance
If you and/or your future partner are considering a premarital agreement, you may each need the assistance of an experienced family law attorney. In fact, it's crucial that each partner consult a different attorney (from different firms) to ensure the rights and interests of each are covered. Get started today by finding a family law attorney with prenup experience near you.