Everyone has heard of prenups, also called prenuptial or premarital agreements. They are legal documents, which allow couples to designate a different set of rules governing property and finances than those set by each state’s base-line family law and probate rules.
While prenups have become increasingly more common, many people get married without entering into a prenup simply because they are afraid to bring up the topic with their significant others.
This is not surprising, since for most people, a prenup is associated with divorce. While the high rate of divorce is certainly a reason to enter into a prenup, it is by far not the only reason. As such, properly understanding the role of prenups and their benefits can eliminate the awkwardness of this honey-we-need-to-talk conversation.
Benefits of Premarital Agreements
Although a majority of premarital agreements are simply used to protect the wealth of one spouse, they may offer many other benefits. There benefits may include:
Ensuring one spouse is shielded from debts of the other spouse
Protecting each spouse’s separate property
Setting rules that govern how assets will be passed upon death
Setting rules as to the financial rights and responsibilities of each spouse during the marriage
Ensuring one spouse’s separate business or practice will not become subject to control of the other spouse or be involved in divorce division proceeding
Allowing for creation of special arrangements between spouses, such as infidelity clauses, etc.
Avoiding extended and costly divorce proceedings
Setting limits for the amount of spousal support to be paid after divorce
In cases where one spouse gives up a career during the marriage, premarital agreements can be used to ensure that spouse is compensated in case of divorce
What Happens Without a Prenup?
Each state has its own set of laws which control divorce proceedings. Without a premarital agreement, these laws will decide the distribution of assets and liabilities when a marriage comes to end. Also, together with other estate planning tools, premarital agreements may prove helpful in case of death of one of the spouses in ensuring that the decedent’s property is distributed according to his or her wishes rather than by the base-line standard of the applicable probate rules. Although, such laws were created to ensure that everyone is treated equally and receives a fair share, they might not be the best choice for your family and your situation.
Why Use an Attorney to Draft a Premarital Agreement?
In case of divorce or probate, the courts analyze premarital agreements with a fine-tooth comb to ensure that they meet all of the legal requirements, such as access to independent counsel, timing between signings, and so forth. There are situations where the court may set aside a particular provision or the entire agreement. Therefore it is crucial to ensure your premarital agreement is drafted correctly and complies with all legal requirements. After all, everyone will probably recall Steven Spielberg’s prenup written on a napkin.
If you are interested in entering into a premarital agreement and would like to have your case evaluated, call 1-844-HOLBORN or email us and one of our estate planning attorneys will be happy to assist you.
Disclaimer: This post is meant for general informational purposes only, and it is not to be construed as legal advice. As with any laws, the information in this blog post may change at any time and may apply differently in different jurisdictions. The post may constitute Attorney Advertising as defined by the rules of professional responsibility of some jurisdictions. Holborn Law is based in Orange County and Riverside. The attorneys of Holborn Law APC are active members of the State Bar of California and licensed to practice law in California. All services relating to immigration and naturalization provided by Holborn Law APC are provided by active members of the State Bar of California or by a person under the supervision of an active member of the State Bar of California.