Prenuptial agreements (commonly referred to as prenups) are no longer reserved for the rich and famous. A prenup is a written agreement, signed before a marriage, which defines the property rights, and in some cases support obligations, of spouses when the marriage ends through divorce or death. Prenups tend to have a negative reputation among couples about to be wed. Many couples tend to buy into the fallacy that if they talk about a prenup they are entertaining ideas about divorce before they are even married. Discussing a prenup may not be romantic but it should not be deemed by any means as a harbinger of divorce. In fact, the existence of a prenup can serve to diffuse tension by clarifying everybody’s expectations. Here are just some of the advantages of a prenup:
Asset Protection: Usually the things each spouse owned before marriage will still be theirs in the event of divorce, but there are exceptions and planning ahead can avoid unwanted stress and save time and money. For example if one spouse has significant pre-marital assets (e.g., retirement accounts, brokerage accounts, real estate or ownership of a business), a prenup can specify what will happen to them in the event of a divorce. Prenups can also help predetermine to some extent how marital (i.e., jointly owned) assets will be divided.
Reduced Cost: Contested divorce proceedings can be lengthy and costly. Prenups can help to reduce the cost of a divorce by eliminating legal battles over the assets which are the subject of the prenup. And by defining these issues, that could help facilitate a more efficient disposition of the entire divorce proceeding.
Open and Honest Discussions Before Marriage: Discussions and open communication lead to a strong marital foundation. While preparing a prenup each party will disclose to the other a complete financial accounting of assets and liabilities. A prenup allows couples to talk openly and honestly about finances before they take the walk down the aisle.
If a wedding is on the horizon, a prenuptial agreement can be a great way to plan for the future. The attorneys at Cohn Lifland Pearlman Herrmann & Knopf LLP can help. Contact us today to see if a prenup makes sense for you.