Prenuptial Agreements: Not Just for the Wealthy
Even if you’re not a prince or princess, there is a lesson to be learned from the recent speculation over whether Prince William and his fiancée, Kate Middleton, will sign a prenuptial agreement before their wedding April 29.
As the royal family has demonstrated over the years, all is not fair in love and war, and couples planning on getting married can’t afford to say “I do” without a prenuptial agreement in place.
Statistics show that nearly 50% of marriages end in divorce, so while you may think prenups are just for the wealthy, that’s simply not the case anymore.
While the subject might be difficult to broach, one has to remember it has nothing to do with how much you love each other and everything to do with making sure you both have an insurance policy of sorts against any storms you may face.
Most people think a prenuptial agreement is only needed when one spouse has significant assets and the other doesn’t, but that not the case.
Here are other situations where a prenup should be taken into consideration:
One partner has a lot of debt: A prenuptial agreement can protect the spouse without the debt from becoming liable for the debt if the marriage ends.
One partner owns a business: A prenup can protect the spouse who owns a business, and his or her business partners, from a battle over the business if there is a divorce.
One partner plans to leave a career to take care of children: Leaving the workforce (even temporarily) can impact a person’s lifetime earning potential. A prenuptial agreement can protect the spouse who left a job by putting in place a financial arrangement to allow him or her to get back on their feet, financially speaking, if the marriage ends.
One partner has family assets: If one spouse has possession of a house, a plot of land, or a piece of art that is intended to be passed down in that person’s family, a prenuptial agreement protects that asset from being awarded in a divorce to the other spouse.
Even when a couple recognizes the need for a prenuptial agreement, there are still misconceptions that exist including:
My partner must not think the marriage will last: No one can guarantee that a marriage, no matter how love there is, will turn into a “happily-ever- after” relationship. Given the high rate of divorce, it makes sense to plan for the “what-if” scenario. Couples should think of it like buying an auto insurance policy: You hope you never have an accident, but if you do, you’ll be glad you paid for the policy.
My partner must not trust me: The opposite is true: The agreement will not be valid without full disclosure of all assets and income by both partners, something that can only happen when both partners trust each other.
Prenuptial agreements are too expensive: When you think about the cost of a wedding as well as the cost of a heated divorce, a prenup is a bargain.
The judge will decide what is fair: The cost of litigating a divorce may mean that the marital assets are used to pay the lawyers. Having a judge decide what is “equitable” is a costly and risky proposition. Why not make that determination for yourself while not at odds with your spouse?
Prenuptial agreements are unfair: Once again, the opposite is true. If an agreement is unconscionable, and a spouse is left in a worse position than before the marriage, the courts will not uphold the agreement.
So, for those of you planning a wedding in the near future, I wish you every happiness and that includes the comfort that a prenuptial agreement will protect both of you in the event there is trouble in paradise.
Silvana Raso is an attorney with the New Jersey-based law firm of Schepisi & McLaughlin, P.A., specializing in matrimonial law.