Are you on the fence about whether or not to create a prenuptial agreement? That’s understandable. It’s hard to tell the one you’re about to marry that you also want to be prepared in the case of an eventual divorce.
Prenuptial Agreements: Good or Bad? It Depends…
There are some advantages and disadvantages of prenuptial agreements. While this post can highlight some of the most common considerations, you should always consult with a professional family law attorney before proceeding with any legal document or procedure affecting your marriage or family.
The Advantages Of Preparing A Prenuptial Agreement
Here are some of the positive aspects I witness when helping couples decide whether or not they should get a prenuptial agreement.
It can improve communication
Every culture and family is different when it comes to finances. For some, their financial status and checkbook balance are practically an open book. In other households, finances are never spoken about. This can result in some pretty serious tension when two people are deciding to get married.
Having conversations about current financial status, projected financial status, and what that means in case of a future separation can help to get you both on the same page. Most importantly, I highly recommend that engaged couples run and share their current credit report. Your partner may have serious debt that will become yours the minute you say, “I do.” For example, once you’re married, the IRS may garnish your joint tax filing for his/her unpaid college debt.
Any issues or tensions that arise while discussing a prenuptial helps to uncover differences so you can sort them out before being legally bound to one another.
Save time and energy
Getting a divorce is never easy, but a well-crafted prenuptial can make it far simpler. Your prenuptial agreement will have laid it all out there, simplifying the pre-divorce financial preparations we typically work through during mediation or in the courtroom.
Protect separate property and family heirlooms
In a perfect world, these items are already protected due to California’s separation between separate and community property. However, if you do wind up getting divorced, the onus is on you to prove that certain assets, property, and family heirlooms were yours before you got married, were bequeathed specifically to you from a deceased loved one during the marriage, or were actually your family heirlooms.
When you create a prenuptial agreement, these items are categorized and clearly stated so there is no debating the fact of whose was whose in the future. If the property is the main concern, rather than assets or wealth, a marital property agreement may make more sense.
Protect children’s inheritance
Prenuptial agreements are specifically helpful for couples where one or both have children from prior relationships. Your prenuptial agreement will determine the children’s future inheritance so it doesn’t become a part of the community property pot.
Ultimately, prenuptial agreements benefit the person who has the most wealth and protects that wealth from being unfairly used or taken advantage of at any point during the marriage. This includes the ability to limit future alimony (spousal support) that would be paid if you get divorced.
The Disadvantages of Prenups
The disadvantages or “bad” of prenuptial agreements are:
You may limit your inheritance
If your spouse is wealthy California’s intestate succession laws grant that the majority of the estate (excluding certain properties or heirlooms, etc.) is yours when your spouse dies. You may not retain that inheritance depending on how the prenuptial is written. That said, your partner and you should also consider creating an estate plan that accommodates what your portion of the estate would be to protect your interests.
One partner’s efforts and energy in the business may not be accounted for
If you have or own a business, or you are an entrepreneur with a business plan, that should be taken into account in the prenuptial agreement. Otherwise, any time or energy you or your spouse spends growing or working for the business may not be recognized in the event of a divorce.
Read, Am I Entitled to My Spouse’s Business in a Divorce, to learn more about that.
Your lifestyle may not be accommodated
If you or your spouse are a lower wage (or no wage) earner, the prenuptial agreement may not account for that, which means s/he is put in a position to fight in court to maintain a certain lifestyle or to keep the house, etc. A good prenuptial agreement should account for this, as we mentioned above, by ensuring the lower-wage earning spouse is taken care of.
Romance may preclude reason when it comes to prenuptial agreements
If you’re the one without the wealth, it’s easy to be cajoled into settling for less or depriving yourself of that normal California divorce laws or inheritance laws would have provided for without a prenuptial. Romantic and honeymoon periods can put a person in a position to agree to things that are not in their future best interest.
If you are considering creating a prenuptial agreement, get your own lawyer or the two of you should visit a neutral lawyer for premarital legal counseling. This way, the lawyer can advise you both without bias or preexisting loyalties involved and help you determine which premarital documents if any, make sense.
As with any long-standing legal document, such as estate plans, prenuptial agreements should be revisited regularly (annually or every other year is recommended) to ensure the things you agreed upon in the moment continue to make sense for your evolving lives together. If not, the prenuptial agreement can always be revised and amended as needed, making it a more relevant legal document called a postnuptial agreement.
Contact The Law Offices of Gerard A. Falzone to schedule a consultation or to discuss whether a prenuptial agreement is worth it.