There is a lot of planning that goes into having the wedding of your dreams. But before you cut the cake, here are a few legal tips you might want to know about.
Talk About Your Financial And Personal Goals Before The Wedding
Once you get engaged, your whole focus shifts towards wedding planning and planning your life together. This might not seem like the most important thing to do in this phase of your relationship, but it is a great time to start discussing how your economic and emotional lives will blend once you’ve said your nuptials. This is also the perfect time to thoroughly talk about your personal and financial goals. You want to get a clear picture of how all realms of your life are going to merge together after your big end-of-the-night send off.
The Protection Of A Prenup
Whether or not you will need a prenuptial agreement is dependent on your unique circumstances as a couple. A prenup can not only help preserve your relationship but it also protects both partners, individually, financially. If you and your soon-to-be spouse are considering a prenuptial agreement, you should reach out to a family attorney for assistance to be sure that there are not any gray areas left uncovered or loopholes that may make the prenup null should you all divorce later. Afterall, the purpose of a prenuptial agreement is to avoid any uncertainties if there is ever a time when you are no longer married.
When couples own a business or are wealthy, a lawyer is able to help protect any assets that they owned before they were married without a prenuptial agreement. In most cases, these types of agreements are used with one or both partners who are professionals, have existing wealth, or if they are planning on having a family and one parent will stay at home to raise any children while the other works for a living in order to financially support the family as a whole.
Common Misconception About Prenups
For decades, it has been a misconception that the sole purpose of a prenuptial agreement is to protect a person’s wealth. In reality, this form of agreement is more than just helping one partner avoid a substantial loss of money or assets in the event of a divorce. The most overlooked but important purpose of a prenup is its ability to recognize the contributions a stay-at-home parent makes while being home with the children. A recent study showed that those who stay home with their children, even if it is only for the first year of their lives, will lose nearly 40% of their overall earning potential.
Prenuptial agreements can be used to neutralize the impact this can have for those parents by helping ensure that the one who stayed at home with the children remains financially supported by their spouse even after a divorce. Each state has its own laws regarding spousal support, so when there is not a prenup in place, it will be left to a judge to decide whether or not the spouse that has been staying at home with the children will still need to be financially supported, and if not, that parent will likely be forced back into working a job outside the home while earning less than they otherwise would had they not stayed at home while the other parent grew their career.
A Prenup Can…
Prenuptial agreements are able to protect a person’s personal property, future earnings, retirement accounts, investment accounts, and any real estate, only if the agreement has specifically outlined each item clearly, without any doubts.
Most people choose to enter into a prenup because one or both of them have already been through a nasty divorce or one of them is bringing substantially more assets into the marriage and they want to ensure that those assets are protected if things don’t work out. In other cases, people choose a prenuptial agreement because they have a business partner that does not want to chance that a divorce will impact their business interests should their business partner lose half of the marital share in the business.
Premarital Agreements Can Be Established To Protect The Following:
- Current personal property – cars, boats, atvs, furniture, art, etc.
- Current real estate holdings
- Current bank accounts
- Current investment accounts
- Current retirement accounts
- An increase in value of any current accounts
- Business ownership and business interests
- Current or future debts owed by a future spouse
- Requiring either or both spouses to write up a will or trust that will fulfill any provisions to the prenuptial agreements
- Determine whether maintenance/alimony will be paid in the event of a divorce
A Prenup Can’t…
Prenuptial agreements can be used to protect a variety of personal property and money, as well as determine what will happen if a divorce should occur. However, there are some things that a prenup is not able to do.
It goes without saying that anything that is illegal cannot and will not be enforced in court even if it was covered in the prenuptial agreement, but there are additional things that are what many state legislatures have reputed “a violation of public policy.” This is rather vague but let’s talk about what kinds of things are excluded from a prenup.
- Anything that is illegal
- Determine the custody of any children – or the allocation of parental responsibilities
- Set child support or limit it
- Eliminate either party’s responsibility for child-related expenses – such as, school, sports or other extracurricular activities, medical expenses, etc.
What Would Nullify A Prenup?
There are several things that can void a prenuptial agreement, but the most common things that you should be cautious about are the timing of it and each individual’s understanding of what is legally accepted. This can mean different things, so we should elaborate.
The timing of a prenup is by far one of the most common reasons that prenuptial agreements will be overturned as one party will make the claim that because of the timing, the prenup should not be enforced during the divorce. Most states have not set a time between the signing of the prenup and the wedding ceremony, and the idea behind this makes sense. A court will not enforce a prenuptial agreement if the judge feels that one person was coerced into signing it with the threat that the marriage would not happen if they did not agree to the terms and sign. Therefore, a prenup that was signed a week before the wedding could potentially look bad as the court might assume that it means that one person was forced to sign it or risk the wedding being canceled which is not only embarrassing but would also leave them out a lot of money.
There is no set time established between when a prenup needs to be signed and when the wedding occurs, however it is typically better to have your prenuptial agreements signed several months before the big day to ensure that a court will not assume it was a coercive act down the road.
Another thing that will be considered is the level of sophistication of each party. For instance, if one person is an attorney, they will be held to a much higher standard than the other. But when we remove that from the equation, this will mainly come down to where both parties have a lawyer to represent each of their best interests or whether one party does have legal counsel and the other does not.
Without legal representation for both parties, and especially if the wedding is near, a court might view this as a coercive act and/or that the lawyer had tricked the person that did not have legal counsel. This is why it is best that both individuals have their own lawyers present as a prenup is being negotiated and drafted.
There are additional reasons that a prenuptial agreement might be nullified by a judge. One being that something unexpected happened to one person that could create serious hardship on that person– this is often referred to as an undue hardship. An example of this would be that the prenup states that there will not be any maintenance/alimony paid in the event of a divorce, but unfortunately one party suffered a debilitating injury or disability. In this situation, a judge might declare that a portion of the prenuptial agreement is void and make the other party pay alimony to the one facing an undue hardship.
How Can You Prepare A Prenuptial Agreement?
To begin with, you should take inventory of all items that you and your spouse-to-be are wanting to protect and discuss these in great detail. Then, you will want to note everything you talked about. Be sure to organize all accounts by name and date. Once that is all done, contact a lawyer to start drafting your prenup and to go over the fine points of prenuptial agreement laws in your state. Your attorney will most likely have a colleague they can refer to your other half to ensure that both parties have legal representation in this phase of the process. This will not only protect everyone, but it will also help to ensure the prenup is enforceable later.
Need to get started on your prenuptial agreement? Helmer & Somers can help you begin protecting your assets both now and later. Contact our team today!
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About Helmer Somers Law
We are committed to helping families resolve their differences and get back to their lives. We help individuals and families fight for custody of children. We protect your rights as you go through divorce proceedings. We offer the guidance and support that you will need when you are involved with the legal system. We help clients with cases involving…
- Divorce and legal separation
- Child custody and visitation
- Child support and spousal support (alimony)
- Property division
- Domestic violence
- Grandparent rights
- And other related issues