It may not be as romantic as flowers, champagne, and a diamond ring, but when you’re ready to announce your engagement, is it also time to sign a prenuptial agreement? Contrary to popular conception, a prenuptial agreement doesn’t mean you anticipate a divorce or that your marriage is doomed. Similarly, drafting a prenup isn’t bad luck or an ill omen. In fact, a well-executed prenuptial agreement is a sign of love and mutual respect because it protects both parties in the coming marriage—literally through better or worse.
What is a Prenup?
If you’ve heard about prenuptial agreements but aren’t certain exactly what they are, or you’ve mistakenly believed they’re only for wealthy people and celebrities, it’s important to get to the truth of about prenups.
A prenuptial agreement is a binding legal document in which both parties in an upcoming marriage define their rights and responsibilities in the handling of their separate, premarital assets and any assets they accumulate during the marriage.
Why a Prenuptial Agreement Can Be a Loving Gesture
Prenups have a bad reputation as agreements meant to selfishly protect one spouse’s money from the other. In reality, a good prenuptial agreement protects BOTH parties in the marriage. When presenting the idea of signing a prenuptial agreement with your fiancé, it helps to explain that defining what is exclusively theirs while you’re still in the throes of your deepest, most loving feelings protects them from even the remote possibility that what’s important to him or her could become a marital asset subject to division during a time when those feelings might have waned. In other words, it’s your best selves protecting each other and preserving the moment for the future.
Is One Spouse Substantially Wealthier Than the Other?
If there is a significant gap in the amount of assets one spouse has compared to the other, a prenuptial agreement can protect both spouses in the event of a future divorce. A signed prenup will protect the bulk of the wealthier spouse’s estate while including a pre-defined structure with an ample settlement amount for the other if a divorce occurs. Again, this agreement takes place when both parties are feeling loving and generous toward each other and provides protection just in case that someday changes.
What if One Spouse Expects to Inherit Family Assets?
If one spouse expects to inherit substantial family assets, property, and/or heirlooms, a prenuptial agreement can ensure that those assets pass from the spouse directly to a future child after the spouse’s death in order to keep the assets in the family. In some cases, this helps the older generation to feel more comfortable listing their child as a beneficiary to their estate because the prenup guarantees that the assets remain in the direct family line.
What if It Actually Comes to Divorce Some Day—or Doesn’t?
One of the most destructive aspects of divorce on the family is a contentious court battle. The rancor toward each other escalates with every hotly contested issue, often dooming the spouses to a lifetime of hostility toward each other that can have a negative impact on the emotional health of their children. A well-executed prenup spares the family the bitterness and animosity typically associated with a divorce because all of the issues of possible contention are already in a clearly defined structure that takes effect upon divorce without having to argue them out in front of a judge.
If you’re lucky enough to have a true love that stands the test of time, there is still nothing to lose by clearly defining each spouse’s rights before the marriage. Some prenuptial agreements include instructions for what happens to assets if one or both spouses die, making them a key part of estate planning as well.
Speak to your attorney about the benefits of a prenuptial agreement in your unique case.