A prenuptial agreement is an agreement between parties who intend to marry that can cover a variety of issues. While most people think of prenuptial agreements as tools for planning for the demise of a marriage, they are not solely divorce planning documents. If you’re engaged to be married, you may be wondering if you should get a prenuptial agreement. The answer depends on what planning you want to do going into your impending marriage. Putting a prenuptial agreement in place prior to getting married does not necessarily mean that one party is planning for the eventual demise of the marriage, the agreement can also serve important estate and marriage planning functions.
While it is often true that the spouse seeking the prenuptial agreement is significantly wealthier than the other spouse, there are many cases where the parties are situated fairly equally and both are simply seeking to keep what is theirs, either in the case of a dissolution or death. There are also cases where a younger person is seeking a nuptial agreement because, although they do not have significant assets now, they anticipate they will at a later date due to inheritance or some other circumstance.
The estate planning aspect is particularly important when one or both parties have been married before and want to preserve their estates for children from their prior marriages. The agreement can include waivers of elective share (a spouse’s statutory right to take 30% of the deceased spouse’s estate if he or she is disinherited or left a smaller portion of the estate) and of homestead rights. A waiver of elective share does not preclude a spouse from leaving assets to the waiving spouse in his or her estate plan, it just gives that spouse the freedom to make whatever choices he or she wants. The agreement can also include waivers of interests in retirement assets to which a spouse would otherwise have entitlement. The spouses can each agree to make specific testamentary or trust provisions for the other if they so wish.
With regards to marriage planning, the prospective spouses can come to agreements on whose house they will be living in, who will pay what bills, whether one spouse will cover the other’s health insurance, and what ownership interest each party will gain in the other’s real property as a result of the marriage, investment of money and marital labor in the other’s property, and various other marital concerns. This can be helpful in setting up expectations prior to marriage.
Finally, prenuptial agreements can be used for divorce planning. I often serve as the reviewing attorney on agreements drafted by the attorney for the other side and my client is not happy that he or she is being asked to enter into a prenuptial agreement. While I certainly hope that none of my clients ever get divorced, a prenuptial agreement is like an insurance policy. We all have automobile insurance and we all hope we will never have to use it but it’s important to have it just in case the worst happens. Prenuptial agreements aren’t romantic but nothing is less romantic than a messy divorce. A prenuptial agreement can waive both parties’ entitlement to bridge-the-gap, rehabilitative, durational, and permanent alimony or, alternatively, lock in a party’s entitlement to alimony. The parties can also designate what items will and will not be considered marital property and how marital property will be divided upon a dissolution. If the parties are going to be living in a pre-marital property belonging to one party, the agreement can include language specifying how long the other party has to vacate the home upon the occurrence of a marriage termination event. These are just a few examples of the divorce planning aspects of prenuptial agreements. If you are considering having a prenuptial agreement drafted or have been presented with one by your prospective spouse, it is important to secure competent legal counsel. At Keane & Keane, we have years of experience drafting and reviewing nuptial agreements and can help you through the process.