Prenuptial Agreements
Key Points
  • Prenuptial agreements are not always for the wealthy. Lawyers will often have clients consider a prenuptial agreement so there is a clear understanding of finances. After all money is a very big part of the marital relationship.
  • Prenuptial agreements certainly address the desired outcomes of each spouse should they divorce, but they also address when one spouse predeceases the other.

Hoping for the Best, Bracing for the Worst

When Sam asks Sally to walk down the aisle with him, the last thing either of them thinks about is money. That’s both unfortunate and ironic. Money, particularly arguments about it, is the issue that wrecks more marriages than any other consideration. And money, particularly very angry arguments about it, often makes divorce bitter and acrimonious. For better, for worse, for richer, for poorer, money, in all its forms, plays an important part in marriages.

If Sam and Sally are like many other young couples, they may not have much money, and they most likely think about the money they have as "our money."

While much of the wealth they accumulate during the years of their marriage will indeed be their money, their money is the thing that can drive a wedge between Sam and Sally, particularly when they leave its management to chance. (That means money in all its forms, including debt.)

Many lawyers advise couples to consider a prenuptial agreement, not only to minimize the bloodshed associated with a marital breakup, but also to start couples with a clear understanding of their finances. A prenuptial agreement (also called an antenuptial agreement or premarital agreement and abbreviated conversationally as a "prenup") assures mutually desired outcomes in the event of divorce and death. It is a private agreement between two persons contemplating marriage, wherein a couple settles important financial questions in advance. This contract overrides and preempts state, family and probate law that otherwise apply. Like all contracts, the agreement should make both parties feel satisfied. Without a prenuptial agreement, divorcing couples divide marital property under the provisions of their state’s laws - either by equitable division (41 states) or as community property (nine states).

"A premarital agreement is an unusual contract. It is an agreement between marrying persons that, at least in part, contemplates the breakup of the marriage. The subject matter of the agreement is unique: no other contract can address such matters as child custody, child education and spousal maintenance. The relationship between the parties is special: the contract is made not by two parties operating at arm’s length, but by two persons who are in love. The contract is enforceable without consideration, or exchange of value, whereas most contracts require consideration. Finally, the contract may not be enforced until years after it was first formed. Although they are exceptional, premarital agreements have become increasingly popular in the United States."

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