What Every Engaged Couple Should Know About Prenups
Guest Post by RoseAnn Branda, Executive Partner and Co-Director of the Matrimonial Law department at Abrams, Fensterman.
Is there anything less romantic than a prenuptial agreement? It’s hard to blame engaged couples for avoiding the subject in favor of writing their vows, fine-tuning their registry, planning their honeymoon or literally any other item on their wedding planning checklist. And yet prenups are on the rise. A 2016 survey by the American Academy of Matrimonial Lawyers shows 51 percent of responding divorce attorneys have seen an increase in the number of millennials requesting prenuptial agreements, with 62 percent reporting an increase in the total number of clients seeking prenups during the last three years.
Behind these numbers is the less-than-sexy reality that prenuptial agreements can play a vital role for those who, despite the love they have for each other, seek to legally formalize certain provisions in the event their marriage dissolves. Sometimes individuals are all too aware of the U.S. divorce rate – currently 40 to 50 percent on average – and simply need the protections of a prenup to confidently embrace marriage. In other cases, they’ve seen family and friends endure painful and expensive divorce proceedings, and need assurances they won’t suffer the same fate.
It’s equally common for couples to be confused about prenups, namely what these agreements accomplish, who they best serve, how to go about getting one, and how to know they’ve been done well.
Prenups 101
As legally binding contracts created by two people before they marry, prenuptials agreements (commonly referred to as prenups) provide clear, legally binding roadmaps for couples should their marriages dissolve and they have to untangle their lives from one another. They can include provisions on such issues as how to divide assets and financial obligations to each other. They can further stipulate who keeps items of significant value, from engagement rings to travel miles.
At one time it was unusual for couples to request prenups unless one or both individuals sought to protect established financial estates. For example, a newly engaged woman who’s taken over a family business might want to ensure that in the event of divorce, the ownership of the business resided with her family members in lieu of being shared with her spouse.
As more and more U.S. states began adopting equitable distributions laws – which make it possible for those seeking divorce to request a portion of their partner’s total assets, including those acquired prior to the marriage – prenups became more vital for a broader range of individuals desiring more control over hypothetical divorce settlements.
Who Benefits Most from Prenups?
While prenups make sense to many couples from all walks of life, some situations warrant them more than others. Those who enter marriages having already earned or inherited great wealth are often inclined to protect it (think famous actors, athletes, business tycoons, etc.). The same is true for those running family businesses and – as stated earlier – want to keep ownership within the family.
Prenups can also be vital for those seeking to preserve the inheritances of children from prior marriages, who could otherwise lose assets to their parent’s new spouse.
Couples who’ve created embryos to preserve their ability to have children can now especially benefit from prenups, as high-profile legal fights between couples whose fertilized eggs have been caught in legal limbo have demonstrated what can happen if there’s no clear determination of who has the rights to embryos in the event of divorce.
What Constitutes a Valid Prenup?
For those who decide a prenup is right for them, it’s vital to understand what ensures the validity of the document to avoid the nightmare scenario of having it thrown out in court during divorce proceedings. Fortunately, the indispensable requirements of a prenup are few and easy to remember:
Complete financial disclosure – proof that a partner hasn’t been fully transparent about assets, debts, income, etc. can invalidate the prenup.
Nobody can be forced to sign something – each partner must have separate legal representation to ensure their interests are fully represented and there can’t be any evidence of coercion or duress from either party. For this reason, it’s often wise to finalize prenups early in the wedding planning process, as individuals can feel pressure to sign if they stand to lose deposits to vendors should they call off the wedding.
The agreement must be “fair on its face” – for example: if the prenup puts one partner in a dire financial situation while leaving the other partner financially sound, courts will not likely enforce it.
How to Select the Lawyer to Write Your Prenup
Finding the right lawyer to handle a prenup can be intimidating, as people don’t necessarily want to ask friends, colleagues or family for matrimonial attorney references; they fear it signals problems within their relationship. Those seeking to avoid such conversations can inquire with their local or state bar association’s lawyer referral service, though it’s important to meet prospective attorneys (ideally more than just one) to get to know the person they’d be hiring and ask a few key questions, namely:
Just how often does the lawyer create prenups? Is he/she specialized in matrimonial law? Obviously, it’s important to avoid retaining say a real estate attorney creating prenups on the side while looking to expand their legal work in other areas. Real expertise is important to ensure the prenup “holds” in the event the marriage doesn’t.
How big is the attorney’s practice? It can seem counterintuitive but individuals can save significant legal fees by forgoing the smallest legal outfits in favor of those who have sizable practices and real staff. The reason for this is that bigger offices make it possible for lawyers to delegate certain responsibilities – i.e., scheduling, researching and compiling financial information, etc. – and charge their clients significantly less for that work.
How’s the chemistry? Does the attorney really “get you?” Like romantic relationships, it’s always best to have some professional chemistry with the attorney creating your prenup to make sure you’ll be able to communicate effectively and work well together.
Prenups can be an extremely difficult subject to discuss with a partner, let alone advance with a lawyer. However, they can help many couples achieve the peace-of-mind they need to enjoy their engagement, plan their dream wedding and embark on a beautiful life together.
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