More and more couples are coming to attorneys looking for prenuptial agreements, commonly referred to as pre-nups. Traditionally thought of as the territory of the rich, pre-nups are now something couples of all ages and incomes are looking into before marriage.
I have worked in family law for over two decades and in the last decade I have noticed an increase in the number of couples coming to me asking for pre-nups. Yes, a certain number of these couples are from wealthy families or have acquired their own substantial assets. But an equal number do not fall into these two categories. They may be seeking a pre-nup because one partner is entering into the marriage with a lot of debt from student loans or perhaps one or both has tax liabilities. Their intended does not want to be liable for those debts in case the marriage terminates. Another reason is that one party may have young children from a prior relationship whom they want to protect. Alternatively, one might be anticipating a substantial family inheritance in the future. In other cases, there is the possibility of large earnings on the part of one or both parties. Sometimes, one party expects to leave the workforce when they have children which can put limitations on their ultimate earning potential. In all these cases, it is helpful to have a clear agreement about how assets, debts, and income will be divided if, as and when the marriage ends.
Pre-nups cover the distribution of present and future assets, income and liabilities if the marriage were to end. Such agreements can leave open the possibility of the receipt of alimony. The payment of child support, unlike alimony, cannot be negotiated in a pre-nup.
Pre-nups can provide protection with or without a limitation on time. Some contain so-called “sunset clauses.” These limit the amount of time that the pre-nup is valid. For example, a sunset clause could limit the number of years that the pre-nup is enforceable or could specify a specific event upon which the pre-nup is terminated. Once the “sun sets,” the pre-nup is considered null and void.
Prenuptial laws vary by state and country. It is critical that the pre-nup follow the rules of your particular state or country when they are drafted.
Do make sure both parties are represented by competent counsel. Each party’s interest should be individually represented and each should have their own attorney.
Do choose attorneys who are admitted in the state where the pre-nup is being drafted. Don’t use a family friend who’s admitted in Idaho if you’re planning on living in Connecticut. These laws vary by state so you want to work with an attorney who knows the law of your state.
Do allow enough time. Drafting these agreements takes time and work on your part and on the part of your attorneys. In our firm, we have what we call “the three- month rule.” Absent unusual circumstances, we suggest to potential clients that they should leave an absolute minimum of three months prior to the date of the wedding to commence the pre-nup process. It takes time for discovery, as well as to collect financial affidavits from each party which cover assets, income and liabilities. The exchange of pay stubs, bank statements, appraisals of valuable assets such as art work, tax returns, retirement accounts and appraisals of a business are all critical to do in advance of signing. You want to have all of your ducks lined up prior to the signing of the pre-nup. You need to allow time to get it finalized and signed.
Do sign the pre-nup with everybody present. We like everyone to be in the same room for the signing. This closes the process and permits the attorneys to question each party’s mental state and capacity at the time of the signing. The signing should not occur at any point close to the wedding date. It is critical to confirm that each party believes the agreement is fair and equitable at the time of the signing. It is also important to ensure that neither party feels any pressure, undue influence, or duress to sign the pre-nup. In certain circumstances, we will consider videotaping the signing for these very reasons.
Pre-Nup Parting Thoughts
Nobody likes to think that a marriage will ever end, as marriages should be blissful and eternal. The thought of pre-planning for an outcome that is contrary to eternal bliss is uncomfortable for many couples. We understand that. We suggest you think of a pre-nup as a form of insurance. You don’t expect your car to be in an accident or your home to burn to the ground. You still do what you can to protect yourself if that happens. It protects your future and your children’s future.
If you decide that getting a pre-nup is not for you, we suggest you take one small step in protecting yourself: make a file of your assets and liabilities at the time of your marriage. Include things like the title to your car, your mortgage and appraisals of any valuable possessions, as well as the most recent statement of all of your bank, brokerage, and retirement accounts. If you get a divorce later, that file will allow you to say, “This is what I had at the time of the marriage.”
If you are unsure of whether a pre-nup is for you, at least take the first step of getting a consultation with a family lawyer who concentrates in this area of the law. Together you can address any concerns you might have about finances or family issues.
By Atty. Jill Heitler Blomberg