Prenups: Protecting Assets and Providing Peace of Mind

Marriage is Hard. But Being Blindsided is Harder.

I hear it all the time. Women come into my office for advice and often ask “if I ask for a prenup, does that mean I think the marriage will fail?”
Short answer: No.

Long Answer: Also, No.
A divorce is like an amputation: you survive it, but there’s less of you.

Margaret Atwood

A prenuptial agreement is nothing more than a document that protects you (& your assets) if shit hits the fan. If your husband wakes up one day and doesn’t remember who you are; Or if you’re in a car accident and lose all short term memory; but Channing Tatum doesn’t take years to win you back – or quite simply, you grow apart.

Life happens. Loss happens. People grow apart.
In my experience the only thing worse than grieving a broken marriage (or in my case engagement) is to then lose your hard earned money. Or your house; Or rental properties; Or beanie babies (yes that really happened). The best part is that it can all be avoided with a well crafted prenuptial agreement. Read on for some of the top reasons to have a prenuptial agreement.

Protect and Divide Your Assets Equitably

First and foremost, a prenuptial agreement determines how assets will be divided if the parties choose to divorce. This applies to financial and tangible assets. It covers cars, boats, houses, a vintage beach cruiser bicycle; as well as cash, stocks, bonds. Having an outline sets clear expectations and reduces room for misinterpretation over items. It can also provide for the lower earning spouse.

When couples elect to NOT draft a prenup, they are agreeing to the state’s set of rules. This can differ greatly depending on where you live at the time of separation. Many states are separate property, others are community property and some are a hybrid. Electing to forego the prenup is a surefire way to be upset with how the state decides to divvy up your assets.

Protect Your Money and Your Peace of Mind

It’s important to outline specific things that you will be receiving as inheritance in your prenuptial agreement. Depending on the state you live in, certain inheritances may not be split, but the accumulated wealth from that item can.

For example: In The Commonwealth of Pennsylvania, if Wife has a house pre-marriage, then she is always entitled to that house because it is not “marital property”. However, if Wife and Husband live in the house for 10 years before filing for divorce (and it becomes more valuable) then the Husband is entitled to half of the accumulated value.

A prenup can outline and define the items/assets that are on or off the table for negotiation. This is also true for businesses, amassed wealth or other forms of income. It’s imperative that before entering into a marriage, you and your partner sit down and have a very transparent discussion about money and expectations.

>Drawing up a prenuptial agreement together is a sign of incredible trust and financial openness – you’re fooling yourself if you think you can achieve complete intimacy without it.

Suze Orman

Define the Terms Around Spousal Support

Prenups are especially great for couples who have an income gap. Remember, a prenuptial agreement can be drafted to benefit both parties. Make sure the agreement is fair and ALWAYS have separate lawyers for each party. If your spouse makes a significant amount more in comparison to your income, then determine what you would need to reasonably live off of and for how long, should something happen.

A good rule of thumb: alimony can be imposed for up to ½ the duration of the marriage. However, it differs greatly depending on financial status, jurisdiction and ability to pay.

Limit Debt Bleed-over

If your spouse has a gambling problem, substantial student loan or credit card debt, you can draft a prenup to ensure that half of that debt doesn’t legally fall on your plate. Knowing the financial situation of your partner is crucial. Transparency is a key to marriage success (not that I’m a doctor or anything; but marital financial problems are 90% of the reason I have a thriving family law practice).

Protect yourself from losing money and from gaining debt by planning ahead.

Reduce The Litigation Process and The Amount of Money You Will Spend

Divorce is costly. My average simple* divorce is about $8,000 $15,000. (Inflation baby. Extended court backlog, increased cost of litigation/mediation etc., have all caused divorce to become incredibly costly.) That’s because people fight about everything – from who gets the toaster, to who pays the insurance – fighting in court gets very expensive, very fast. Therefore, having a clear outline by way of a prenup is a great way to reduce the cost of litigation.

Prenuptial agreements can be complex documents. Reach out to The Legal Hill, PLLC today and schedule a consultation.

This article was originally published on our sister site, LegallySavage.com