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Feb
02

Before Saying, “I Do,” Plan for “I Don’t”

People consider Prenuptial Agreements for a number of different reasons; for example, because the marriage is not their first and they therefore seek to simplify matters in the event of a future divorce, or to ensure that property brought to the marriage will not be subject to a division of marital assets should the marriage dissolve. A properly drafted Prenuptial will accomplish all of those goals.
A good Prenuptial Agreement:

  • includes full disclosure of assets and liabilities
  • is negotiated by separate counsel for each party
  • bars the surviving spouse from electing to take his/her marital share upon the death of the other spouse
  • provides for alimony and property divisions
  • has fair and reasonable terms at the time of execution

Of course, a Prenuptial is always subject to mutual revocation, and an estate plan drafted after marriage, or even in contemplation of marriage, will prevail over a Prenuptial.

In short, Prenuptials are good in that they allow for pre-marital planning and protect property brought into a marriage. One problem is that Prenuptials do not eliminate all uncertainty. Regardless of how carefully drafted a Prenuptial may be, in the event of a divorce, courts have the discretion to determine whether a Prenuptial was fair and reasonable at the time of execution, and whether it remains so. Also keep in mind that not all blushing brides and nervous grooms relish the idea of a Prenuptial, and often view them not as a smart financial planning device, but as an indication of mistrust.