The most legally significant events in most people’s lives are getting married, getting divorced and dying. And yet, many people make little effort to understand the legal consequences of these events. However, a discussion about one key document addresses all of them. A prenuptial agreement. A prenuptial agreement, also known as a prenup or antenuptial agreement, is not about planning for divorce. It is about planning for the future. What are your expectations, priorities and intentions as a married couple?
Everyone who gets married effectively has a prenuptial agreement. If there is no written agreement, the agreement is to be subject to the vagaries of state law. These laws vary tremendously between states, may be many decades old, and can surprise you.
A prenuptial agreement typically has three distinct parts. First, it defines what is marital (shared) property and what is separate (individual) property. This was less important when people tended to marry and have children right out of high school or college, have minimal assets when they got married, and stay married for 30+ years. Indeed, the law is often tailored to this ideal. This section tends to be most important for persons who have significant premarital assets, expect a large inheritance, or participate in a multigenerational family business.
The second part defines what happens to the couple’s assets when one or both perish. Assets may be divided very unequally among heirs, particularly if either party has separate children or the couple has no children. One spouse’s family may get the majority of assets, and the other spouse’s parents, siblings, nieces, nephews, and children may get substantially less. Even if one spouse is completely trustworthy and promises to look after the other’s family, people change and emergencies force hard decisions. If both are in a serious accident, but one manages to survive a week longer than the other, it may not be the spouse making the decisions.
The third part of a prenuptial agreement is about what happens in a divorce. This is not about winning or losing. This is about agreeing on what is fair to both parties when they hopefully both want what is best for each other. Nobody wants a bitter divorce. Often, what makes divorces bitter is surprise and fear of being taken advantage of. Typically, both spouses genuinely think they are only asking for what is fair, and yet they may be miles apart. This tends to make both parties defensive and focused on “not losing” (“the principal of the thing”), not their own best interests. This can lead to expensive conflict. In contrast, a divorce with a prenuptial agreement is often faster, cheaper, and more certain. This can minimize the trauma for both parties, help them heal, and lead to better outcomes for the parties and their children.
This is not about protecting the wealthy spouse. Often it is about setting expectations by agreement, so the less well-off spouse is protected without having to waste money they may not have gambling on the outcome of a trial. For example, when discussing spousal maintenance, this is also a good time to talk about the fact that if one spouse stays at home for five years with the children, that spouse may be missing out thirty or more years of raises and promotions they could have earned in those five years, even if they do not have to start over in a new career. This could impact them for many years after a divorce. In these circumstances, a fairly negotiated prenuptial agreement (or postnuptial agreement after marriage) could protect the less economically stable spouse. Even in the worst case, knowing the rules and impact of a decision is usually better protection than closing your eyes and hoping for the best.
Prenuptial agreements do not make a marriage any less of a partnership. They are not about distrust. Prenuptial agreements are about building a strong foundation of shared understanding and shared expectations. It is perfectly reasonable to decide not to have a prenuptial agreement. However, I believe the conversation itself about the issues they raise is inherently valuable and a meaningful decision requires knowing the likely impacts of the decision.
Thomas Witt is an attorney with Fryberger, Buchanan, Smith & Frederick, P.A., practicing in the areas of Family Law, Employment Law, and Civil Litigation. This article is not intended to provide legal advice. You should always consult with an attorney about your specific circumstances.