Are you living your dreams or your fears?
So you’ve decided that you need a premarital agreement (prenup). Whether you plan to create your own prenup or hire an attorney to create one for you, this article will help you think about some of the specific areas that you can cover. You may not cover all of the items I list. However, it is good for you to be aware that the items are issues that you should address.
- Assets, liabilities, etc.
You should be prepared to list your assets, liabilities, income, and expectations of gifts and inheritances.
You should be prepared to discuss the manner in which premarital and post-marital debts will be paid.
- Premarital Property at Death or Divorce
You should think about and discuss what will happen to your premarital property at death or divorce. You should also consider the post-marriage appreciation in the value of your property.
Be sure that you have considered each type of property, whether that property is jointly owned or individually owned.
- Property Acquired After Marriage
You should discuss and agree upon what will happen, at death or divorce, to the property that is accumulated after the marriage.
- Determine the Status of Gifts
You should determine the status of gifts, inheritances, and trusts that each person receives before and during the marriage.
- Retirement Plans
You should be prepared to select the person who is to receive each retirement plan in the event of death and/or divorce.
Consider whether a party will receive spousal maintenance at divorce. If yes, then determine the amount. If you determine that spousal maintenance is contingent on some event, then determine what event qualifies.
- Death Benefits
You should discuss your death benefits in detail. State what you will provide for in your will. You should also consider what role (e.g., executor) you want your spouse to play in administering your estate.
You should decide on the types of insurance coverage – medical, life, disability, etc. – you will have.
10. Identify Attorneys
You should identify the attorneys that will represent each party in the creation of the prenup.
11. Provide for Child Support and Custody
Some choose to discuss custody and child support matters. However, agreements concerning the children may not be upheld by a court in a divorce, because the judge may determine that the agreement is not in the child’s best interest.
12. Applicable Law
You should decide what state’s law will apply to your agreement. You should also decide what will happen in the event that you move to another state.
Some people like to include clauses that describe their expectations. For example, parties might want the agreement to say that the woman will agree to attempt to have or adopt children. Or the parties might want the agreement to say that each spouse will provide a loving environment for the other spouse. Some of these miscellaneous provisions may be unenforceable, but the parties choose to insert them because it helps them outline the emotional needs of the parties.
Sycamore Row (New York: Dell, 2014)
I recently read Sycamore Row, a novel by John Grishan. Sycamore Row is said to be the sequel to A Time to Kill, Grisham’s first novel.
Sycamore Row is set in 1988, a few years after attorney Jake Brigance successfully represented Carl Lee Hailey in the trial that was the center piece of A Time to Kill. Jake is representing the estate of Seth Hubbard, a man who makes change to his will days before hanging himself. The new will excludes most of his family and awards his multi-million dollar estate to his care taker. The will contest that ensues is exciting and worth reading.
He who knows not and knows not that he knows not, but thinks that he knows, is a fool – leave him alone. He who knows not, and knows that he knows not, is a child – teach him. He who knows, but knows not he knows, is asleep – wake him. He who knows, and knows that he knows, and uses what he knows, is a leader – follow him. — Willie Jolley (paraphrasing a German proverb)
What do you think?
There is a lot of debate about who should have a premarital agreement (a/k/a, “prenup”) and whether it is worth the trouble to ask a partner for one. In the paragraphs that follow, I will discuss the factors that you should take into account when deciding whether a premarital agreement is right for you.
The Divorce Laws in Your State
The first question you should ask yourself when determining whether you should have a premarital agreement is this: Do I like way my property will be split if I divorce without a premarital agreement? I recognize that this is a difficult question to ask because it forces you to think about the end of your relationship. But the state that you live in has already set guidelines that a judge is likely to use in the event of a divorce. Moreover, even if you live in a state that has divorce laws that you like, nothing stops your partner from moving to a state with different laws, establishing residence in that state, and then filing for divorce in that state. If you do not like the divorce law in the state where you live, or you want to make sure that your spouse cannot file for divorce in a state with laws that you do not like, then the best way to protect yourself is to take control of your future through a premarital agreement.
Your Wealth Compared to Your Partner’s Wealth
If you are wealthier than your partner is, then you can use a premarital agreement to help ensure that your partner is marrying you for you – not your money. On the other hand, if you are poorer than your partner is, then you can use a premarital agreement ensure that you are financially protected.
You Have an Ex-spouse or a Child from a Previous Relationship
For those who have been married and/or have children from a previous marriage or relationship, a marriage brings about legal and financial concerns are often very different from those that were involved in your first marriage. For example, you may have support obligations. You may also have a home or other significant assets. A prenuptial agreement can ensure that when you pass away, your assets are distributed according to your wishes.
One of the Parties has a High Debt Load
If one of the parties has a significant debt load then a premarital agreement can help ensure that the “innocent spouse” does not have to take responsibility for payment the debt in the event of a divorce.
You Own Part of a Business
If your marriage ends without you having a premarital agreement, then you spouse could end up owning a share of the income earned from your business. Business partners and potential investors may be concerned about working with someone in your situation. What’s more, you might be concerned about the prospect of sharing income, at divorce, with someone who married you after you had established your business. A prenup can ensure that your income from your business remains your separate property.