If you’re getting married, you might be considering a prenuptial agreement, or a prenup.
Many couples complete a prenup to achieve security and peace of mind around their assets and debts before marriage. A prenup clearly defines what will happen to those entities once the couple marries, as well as how spousal support will work in the event of a divorce.
While prenups can have their advantages, there are also drawbacks to consider. Today, we’re breaking down the pros and cons of this contract so you can make an informed decision.
What Is a Prenup?
Before we dive into the details, let’s answer an important question: What is a prenup and how does it work?
In short, a prenup is a written contract created by two people before they get married. This contract will contain the following details:
- All of the property that each person owns
- All of the debts that each person carries
- The property rights of each person after the marriage
- Provisions to set aside assets for children from a previous marriage
- Provisions defining the amount of spousal support a spouse will receive upon divorce
While it’s common to associate prenups with celebrities or the ultra-rich, the reality is that this can be a valuable document for any couple. Increasingly, individuals of modest means are completing prenups to protect their personal assets before entering into a marriage.
To ensure that the prenup is mutually beneficial and does not favor one spouse over another, each party must have their own legal representation to review the prenup and advise on any discrepancies and questions.
Pros of a Prenup
Why should engaged couples get a prenup? Here are a few of the advantages of doing so.
Protect Your Wealth
A prenup allows you to clarify your financial rights and responsibilities during marriage. Regardless of your income level or whether or not you have children together, this is an important part of protecting your wealth.
Many people assume this means protecting your wealth from one another, but this isn’t entirely accurate. Rather, a prenup allows you and your spouse to work together. It protects the individual wealth that you bring into the marriage as well as the money you earn together, or the assets you acquire, once you’re married.
Within this contract, you can clarify:
- Personal property that will remain separate, and what you will share
- Each spouse’s right to manage or control individual assets or separate properties
- Each spouse’s role in handling the couple’s shared property and finances
- How you will divide key property holdings (e.g. real estate) in the event of divorce
- How you will manage anticipated inheritances
Designate Property to Children
By law, a prenup cannot contain any details on child support or child custody. However, you can use it to dictate what happens to your personal property if you die. This is especially important if either spouse has children from a previous marriage.
Without a prenup in place, a surviving spouse may have the right to claim a substantial portion of the deceased’s property. With a prenup, you can specify exactly what you want to leave each child, as well as how much to set aside for your spouse.
Protect Yourself From Debt
Are you or your spouse entering into the marriage with a large amount of debt? If so, it can be financially debilitating for your partner to carry that load. Within your prenup, you can develop a plan to address any debt brought into the marriage, as well as any future debts you or your spouse may accrue.
Clarify Alimony Terms
Alimony is a predetermined sum, paid periodically to a spouse or former spouse following a separation or divorce. While no one wants to think about the marriage ending when it’s just beginning, it’s important to consider that possibility and prepare ahead of time.
In your prenup, you can specify if a spouse will pay alimony to another spouse, and under what conditions those payments would occur.
Avoid Future Arguments
By outlining important issues such as property division and alimony up-front, spouses can avoid contentious arguments down the road if they ever divorce. A prenup details all of these terms so there’s less ambiguity around what will happen, which helps relieve a degree of stress from the situation.
Cons of a Prenup
If you’re thinking about a prenup, it’s important to be well informed. Here are a few of the drawbacks to consider before you begin.
Not Always Ironclad
While a prenup is a legal document, the court isn’t always required to follow it. For instance, a judge could deem yours unacceptable if it appears to strongly favor one spouse over another. It can also be dismissed if it includes clauses or provisions that violate the law.
This is why it’s critical to work with a qualified, experienced attorney when drafting this contract. If each spouse has a reputable legal team representing their best interests, there’s less risk that the final product will be biased in any way, and it’s more likely to be honored in court.
Can Signify Distrust
Over the years, public perceptions around prenups have become skewed. Many people assume that when a couple creates one, they have a reason not to trust one another.
In reality, this document can bring couples closer together. It requires them to communicate on tough topics and work through future issues before they snowball into bigger problems. It’s a proactive way to protect their interests, both individually and as a pair.
Isn’t Romantic
No, it might not be romantic to talk about money, property, and inheritance when you’re still blissfully betrothed. Yet, a prenup doesn’t have to ruin the romance in a relationship!
When a couple looks at this contract realistically, it becomes clear that it’s more pragmatic and practical than anything. It allows you to put dedicated plans in place now, so there’s less conflict when your marriage begins.
Thinking About a Prenup?
Now that you know the ins and outs of a prenup, are you thinking about drafting one with your future spouse? If so, our legal team is here to help.
At New Direction Family Law, we have more than 50 years of combined experience protecting the rights of our clients in essential family law matters. We take a holistic approach to each case, providing high-quality service to individuals in Wake county, Durham county and Johnston county, North Carolina.
To learn more about our services, contact us today.