In this blog, we’ll answer some of the most pressing questions about prenups, and we’ll shed some light on why you may want to get a prenup before marriage.
For starters, if you fall into one of these categories, and you want to protect your wealth in the event of divorce, you may want to consider getting a prenup:
- You have accumulated wealth before marriage and are concerned about having to share that wealth with your spouse if you divorce;
- You expect to accumulate wealth after your marriage, either through inheritance or your business dealings or operations, and wish to limit your obligation to share that expected wealth with your spouse if you divorce;
- You and your fiancé each have sufficient incomes to support yourselves if you divorce, and you want to limit your obligation to them for spousal support or alimony;
- You have considerably more wealth and/or considerably higher income than your fiancé and you would prefer to limit your exposure to either distributing that wealth with them or to having to pay them spousal support or alimony;
- You are concerned about being responsible for the debts of your spouse during the marriage or if you divorce; or
- You want to avoid costly litigation in the event of divorce and would like to define your rights and responsibilities now before marriage.
Establishing separate property
Prenuptial agreements are often used to define separate property so that all property owned before marriage will remain that person’s separate property if they divorce. Therefore, both parties on the agreement are required to fully disclose their assets and debts in a financial statement that must be attached to the agreement. Quite often, the prenuptial agreement will contain language that states that each person can dispose of or utilize their separate property in whatever manner they wish, and any property that is purchased after marriage with separate funds or separate property shall also continue to be separate property.
What is marital property?
A prenuptial agreement is also used to define what constitutes marital property. Generally, marital property is any property that is acquired in either person’s name between the date of marriage and the date one spouse files for divorce. This property can include real estate, bank accounts, investments, etc.
It is possible, though, to use a prenuptial agreement to provide that if the property purchased during the marriage can be traced back to either party’s separate property, then the marital property in question will be divided in proportion to the contribution from each party in the event of a marriage dissolution. This is quite different than what would happen if there was a divorce without a prenuptial agreement, because in that case, the property would more than likely be divided equally without regard to each party’s contribution to the acquisition of the property.
How might a prenuptial agreement affect your divorce?
A prenuptial agreement defines the terms that will determine the division of your assets and debts, and whether alimony will be paid – including for how long and how it might be calculated – if your marriage ends. A prenuptial agreement can also limit what the lawyers need to address in the divorce, which would then only include a division of property acquired during the marriage. Having this type of plan in place usually aids in keeping divorce costs down and removes much of the stress associated with the financial aspects of a divorce.
In many ways, a prenuptial agreement resolves many, if not all, of the divorce issues. Typically, the only issues left unresolved are those related to any children born or adopted during the marriage, and issues relating to children cannot be included in a prenup.
If you have questions about prenuptial agreements, and whether a prenup may be appropriate for your upcoming marriage, call the attorneys at DeTorres & DeGeorge today to schedule a consultation.