An ounce of prevention …
Prenuptial agreements, also called “premarital agreements,” are contracts entered into between persons who intend to marry. While they are not appropriate for all couples, and can be tricky to negotiate, they can provide a measure of financial security and certainty in the event the new marriage is not successful.
Should I have a prenuptial agreement?
Prenuptial agreements make good sense if:
- This is your or your partner’s second or subsequent marriage;
- You have (or your partner has) significant premarital assets; or
- You have (or your partner has) children from a prior relationship that you wish to protect.
A prenuptial agreement can define separate property and jointly owned property and specify how you will divide property acquired during the marriage in the event of separation. For many couples, the negotiation of a prenuptial agreement necessarily involves some discussion about where you will live and how you will support yourselves. Some couples choose to pool their incomes, while others elect to keep their money separate but share in joint expenses. The prenuptial agreement can address postseparation support and alimony. It can also address who will move out of the marital residence in the event of a separation.
Next, a prenuptial agreement can contain relinquishments of estate rights arising by reason of the marriage. Such provisions can be used to protect children’s inheritances.
Negotiating a prenup using the collaborative process
The discussions between partners that lead to a prenuptial agreement can be healthy and productive to their relationship. Each party comes into the marriage knowing where the other stands financially and what is important to the other. Committing to an orderly and peaceful separation, if it ever occurs, can bring peace of mind.
The most efficient and respectful way to negotiate a prenuptial agreement is using the collaborative process:
- Each of you hires a collaborative attorney.
- You and the attorneys meet together to discuss your goals and intentions in establishing the prenup.
- Financial information is voluntarily disclosed and discussed between you and your attorneys.
- The attorneys jointly draft the prenuptial agreement.
- You and the attorneys meet together to review and sign the agreement.
Among other things, a respectful and sensitive negotiation prior to the marriage can set the tone for how you and your spouse will resolve disagreements, which all couples experience from time to time. As Benjamin Franklin once wrote, “An ounce of prevention is worth a pound of cure.”