Whenever celebrities or powerful public figures announce a divorce, people flock to TMZ or other gossip sites to see if there was a prenuptial agreement (or prenup). The general idea behind this fascination is that without a prenuptial agreement, all of the marital property earned and acquired during a marriage is subject to getting spilt in half between the parties. So, when a super-wealthy pop singer marries, then divorces her backup dancer husband without a prenup, the headline becomes: pop singer loses half her fortune in divorce.
Unfortunately, these headlines are misleading as they ignore the fundamental idea behind marital property—that both spouses make a balanced contribution to the marriage, household, and children. In addition, they create a one-dimensional picture of what prenuptial agreements are actually used for in practice. While prenups are famous for their notoriety in those public circumstances, they are in fact a feasible and reasonable consideration for non-celebrities as well.
Prenuptial Agreements are Contracts
Prenuptial agreements are legally binding contracts that couples enter into prior to their marriage, and they become enforceable on the parties’ date of marriage.These agreements can prospectively address many different issues, but are most commonly used to address what happens with property, income, and debts if a couple divorces. It can also encompass spousal support payments and how expenses will be paid should the marriage end. Since these agreements are contracts, either party can bring non-compliance before a court for breach of contract and enforcement of its terms.
Prenuptial Agreements Provide Certainty
Bitter property division battles can be ruinous for both spouses. Just recall the example of the Jaime and Frank McCourt, the one-time co-owners of the Los Angeles Dodgers Baseball team. At the time of their divorce, they made public statements that the teams operations would be unaffected by the divorce proceedings. This was more wishful thinking than reality, as their divorce became so contentious and expensive, that they were unable to pay the expenses of the team and ultimately the team was sold from under them.
A prenuptial agreement provides certainty as it can specifically address the separate property that each spouse brings into a marriage, such as real estate, personal property, inheritance, or business interests, and makes sure that it remains with that spouse. This is because of the risk that separate property can be converted into marital property when sold or comingled with other funds during the marriage. A prenup can also designate who will be responsible for debt and protect spouses from the debts of the other spouse. In addition, the ability to reach an agreement regarding spousal support can provide security and peace of mind.
In addition to providing certainty, having the foresight to preemptively address these issues can allow the spouses to relax, and to know that should their marriage actually end, that they will not be caught up in an expensive and protracted legal fight over property and alimony.
When is a Prenup a Good Idea?
There are numerous circumstances where you should discuss a prenuptial agreement with an attorney. This includes when:
- One or both spouses have children from prior marriages, whose financial interests they want to preserve;
- One spouse’s income is significantly higher than the other’s;
- One or both spouses have significant or complex assets;
- A spouse has existing business interests; and
- Debt, or the potential for debt problems, is a salient issue for either spouse.
New Direction Family Law
Prenuptial agreements get a bad rap when they can actually be very useful and cost-effective. If you are interest in exploring a prenup, contact New Direction Family Law. We can help you create a smart, legally enforceable agreement that will provide you with peace of mind and certainty as you take a leap into a new marriage. Call New Direction Family Law at (919) 719-3470 to schedule an appointment, or contact us through our website.