Prenuptial Agreement Series - Part I
It is a common misconception that a Prenuptial Agreement is only for the wealthy. Just because you don’t have real estate like Donald Trump or a six-figure contract like Johnny Football doesn’t mean that a Prenuptial Agreement doesn’t have value to you. You may be protecting your income or the minimal assets you are bringing into the marriage or you may be protecting what you don’t even have yet.
Some aspects of a Prenuptial Agreement that apply to the wealthy can apply to us common folks too. For instance, you can protect the assets you are bringing into the marriage such as a house that you owned prior to the marriage. We commonly see people use the proceeds from the sale of the house they owned prior to the marriage to buy their new marital home. However, just because you contributed all of these funds to purchase the new house with your spouse doesn’t mean you are automatically going to get all of those dollars back in a divorce. It is a frequently litigated issue determining whether and how much of the house the new spouse is entitled to even if he or she did not contribute anything to the purchase. Crafting a Prenuptial Agreement to address this issue can reduce the need for litigation and ultimately save you thousands of dollars in legal fees, not to mention significantly shorten the length of your litigation which comes at an emotional cost.
You may also protect your business and any new growth in your business with a Prenuptial Agreement. It is a common misconception that just because property, such as a business or a house, is titled in only your name, that your spouse has no interest in it. However, your spouse can be entitled to the appreciation in the value of assets that accrued during the length of the marriage. This also applies to your business. So even if you are only have a small business now or even just a side business with minimal income, if the business becomes more successful, even beyond your wildest dreams, your spouse may be entitled to a cut of that if you ever get a divorce. A carefully crafted Prenuptial Agreement can preserve your interests in the business.
A Prenuptial Agreement can also protect you from paying alimony in the event of a divorce. You may think this is something you don’t have to worry about because your spouse is career-driven to move up the corporate ladder, or perhaps you spouse earns more than you do. However, sometimes that changes over time, particularly when a couple has children. The spouse who earned a six-figure salary with his or her focus on the next promotion may be a stay-at-home mom or dad when the babies come.
The only issues you cannot address with a Prenuptial Agreement are custody and child support relating to the children. Those are issues that require a careful analysis of the best interests of the children based upon all of the circumstances at the time of the divorce.
Even if you don’t know exactly what you would want in your Prenuptial Agreement, such as how you would want to split assets or how you would want to address alimony, we can talk you through it to help you craft a Prenuptial Agreement that will protect you in the future. The best result, of course, is that you never need it. Having a Prenuptial Agreement is like insurance: we all hope we never have to use it, but it is there if we need it.
Contact us today for a consultation to discuss your options!