The Power of Prenuptial Agreements
A prenuptial agreement provides couples with an opportunity to take control of their financial futures in the event of a divorce. By having a prenuptial agreement in place, couples can navigate separation and divorce with confidence and certainty, avoiding reliance on a judge to decide the fate of their assets. Though initiating a conversation about prenuptial agreements can be uncomfortable, the discussion will open communication about finances and set the stage for a healthy marriage.
Who Should Get a Prenuptial Agreement?
While prenuptial agreements can offer financial protection to a wide array of individuals, those in the following scenarios are most encouraged to consider a prenup:
- Significant premarital assets,
- Complicated Estate planning concerns,
- Transitioning employment,
- Pre-existing business interests.
Do I need an attorney?
Because of the nature of a prenuptial agreement, your interests may not necessarily be aligned with that of your soon-to-be spouse. Therefore, you should each retain independent attorneys who can assist you throughout the process.
Getting the Process Started
When discussing a prenuptial agreement with your partner, prioritize transparency and honesty. Communicate about your financial circumstances and how you envision sharing finances and assets during the marriage and in the potential post-marriage. Different approaches include:
- Couples discussing what they would like to see in a prenuptial agreement. Those interests can then be conveyed to attorneys to negotiate, prepare, and finalize agreement.
- Couples sit down with a mediator and their attorneys to review and draft the prenuptial agreement.
Requirements of Prenuptial Agreements
Though there are many specific requirements, generally, a valid prenuptial agreement requires a full financial disclosure from both parties. A full disclosure ensures an accurate and complete understanding of each other's assets and prevents later claims that essential information was unknown prior to entering into the prenuptial agreement. Additionally, the agreement must fair and reasonable to both parties and must be entered into voluntarily, with both parties having the capacity to understand the implications as well as the opportunity to fully review and understand said terms and implications. This means that prenuptial agreements should be prepared well in advance of a potential marriage to avoid any unnecessary rush. Finally, the agreement should be in writing and signed by both parties.
While powerful, generally speaking, prenuptial agreements do have their limitations. It is important to consider limitations placed on prenuptial agreements specific to your state. In Maryland, prenuptial agreements cannot predetermine issues related to child custody and child support nor impose illegal requirements on a party or encourage a divorce.
Updates to your Prenuptial Agreement
Like any contract, prenuptial agreements require adherence to the terms for its intended goals to be achieved. Due to life changes, updates to the agreement to ensure adherence may be necessary to ensure the agreement remains relevant. If you fail to keep your prenuptial agreement updated with major events, you risk having ineffective terms.
A well-drafted and properly executed prenuptial agreement offers couples peace of mind regarding their financial future and helps to simplify disputes should separation and divorce arise. A timely and diligent approach to creating a prenuptial agreement can be challenging but provides significant benefits. If you or someone you know is considering a prenuptial agreement, consultation with an attorney experienced in the preparation of prenups is important. When used wisely, prenuptial agreements can contribute to a secure and transparent financial foundation for a lasting marriage.