They aren’t romantic, but they are practical. Prenuptial agreements have been around for years. They provide a way for individuals to protect the assets and property they bring into a marriage. They also determine what should happen to the various financial pieces should the marriage end. At its most basic level, a prenuptial agreement is a contract, agreed to by both parties, that inventories the premarital assets so the original owner retains rights to that property. Some “prenups” go deeper, spelling out details such as alimony and death benefits. However, in Florida, a prenuptial agreement cannot be used to determine child custody or child support. The court sets support based on the ability of each spouse to pay at the time of the divorce.
Prenups are gaining in popularity. A 2013 survey of divorce lawyers by the American Academy of Matrimonial Lawyers found that 63 percent reported an increase in the number of prenups drafted. When the AAML revealed its findings, president Alton Abramowitz said in a release, “As the financial and real estate markets continue to improve, there is a greater awareness of risk to possibly sharing these gains in a divorce.”
Millennials and those in second or third marriages are likely to enter into prenuptial agreements. For example, some millennials are not interested in taking on the hefty student debt of a new spouse. Those entering into second marriages are more interested in ensuring that their assets end up with their children from a previous marriage, and not the new partner’s children.
So before signing a prenuptial agreement, let’s consider some of the pros and cons.
Pros To Signing A Prenuptial Agreement
- If one spouse has a business or professional practice, a prenup can protect it from being divided in a divorce.
- Prenups protect the wealth each spouse had before they entered the marriage.
- Prenups can preserve inheritance rights. Each partner may want to pass their assets to their children from a previous relationship.
- Prenups can be written to limit the amount of alimony in a divorce based on the length of the marriage. For example, alimony can be limited if the marriage lasts only a short period of time.
- Prenups can prevent one spouse from assuming the debt of the other.
- If one spouse sacrifices a lucrative career for the marriage, the prenup states that spouse is compensated if the union doesn’t last.
- Prenups provide an excellent opportunity to set the expectations going into marriage. For example, will the higher earning spouse support the children of the lower earning spouse?
Cons
- The mere suggestion of having a prenup may suggest one party lacks trust. Many times this becomes a source of friction in the relationship.
- Prenups can stipulate that one party gives up rights to the estate or any inheritance if the other spouse dies.
Even if one spouse increases the value or success of a business, a prenup can specify he or she is not entitled to compensation. - Because it is difficult to envision all the issues that could arise, sometimes one party agrees to terms that are not in his or her best interests. Consult a family law attorney to protect your interests.
- A prenup can be declared invalid if the agreement lacks fairness or if there is evidence of fraud.
Prenups can include a “sunset clause.” Essentially, this means the premarital agreement is in effect for a predetermined amount of time, say, 10 years. So if the marriage lasts, both parties can feel more comfortable knowing that the prenup will expire.
Consult a family law attorney to determine if a prenuptial agreement is right for you.
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