Discussing divorce with your fiancé isn’t exactly what’s on everyone’s mind while they are wedding planning. However, you might be rightfully concerned about what would happen in case of divorce are death and waiting to right before the wedding to bring this up is not a good call. You may also be worried that suggesting a prenuptial agreement could hurt your future spouse by making him or her feel as if you don’t trust them, thereby creating friction before the marriage even begins.
While such concerns are valid, you should know that prenups aren’t your only option for shielding your assets from these scenarios. With a well-designed estate plan you can structure your assets in such a way to keep what you have safe, provide for your future spouse in the event of your death, and also protect your assets in the event of a divorce. In this way, you can avoid having the potential awkward and upsetting prenup conversation all together.
It is important to talk with your future spouse about your assets, what would happen in the event of your death, and furthermore make plans in advance so you can feel confident that any children from a prior marriage or an expected inheritance are well-planned for no matter what happens. In this two-part series, I’ll first discuss the pros and cons of prenuptial agreements and then in part two, provide estate-planning alternatives you may want to consider.
Sets clear financial expectations: Money problems are one of the leading reasons that marriages end, right up there with infidelity, so not openly discussing money and the partnership’s financial expectations can lead to big problems down the road. A well-counseled prenuptial agreement could be an opportunity to start your marriage with complete transparency and clearly establish the financial and property rights of each spouse should a divorce occur or in the event of a death in the marriage.
Helps protect your separate assets: If you have any tangible or intangible assets you are bringing into the marriage that you don’t want to risk losing, a prenuptial agreement can help shield that property from divorce proceedings or from a future “elective share” of a spouse upon your death. This can be vital if you have significant assets like a business, real estate, intellectual property, vehicles, or family heirlooms. Furthermore, if you know you’ll want to ensure your assets go to children from a prior marriage, a prenuptial agreement can protect those assets for your children.
Helps prevent a lengthy, contentious, and expensive divorce. A prenup can help ease the stress and pain of a divorce. Clearly establishing the financial and property rights of each spouse when the relationship is at its most loving—and putting those parameters in a legally-binding document—can greatly reduce the chances of you two dueling in the courtroom later on if your marriage doesn’t work out. A long, expensive court battle is the last thing you need when dealing with the painful emotions and often-hefty legal fees associated with a divorce.
Helps prevent disputes over debt: Not everyone is equal in their ability to manage their money. As mentioned earlier, disagreements over finances are a frequent reason marriages fail. Therefore, it could be a good idea to use a prenup to identify who is responsible for taking care of specific debts and liabilities. You don’t want to be stuck paying for your ex-spouse’s credit card debt when you had nothing to do with racking it up.
It’s not exactly a romantic gesture: Unfortunately, many people associate a prenup with expecting the marriage to fail or indicating a lack of trust, even though that’s not necessarily true. Assumption or not, such concerns should be respected and addressed as tactfully as possible. When you get down to it, the reality is marriage involves lots of issues that aren’t romantic and dealing with such delicate matters up front could bring the two of you closer (or expose hidden red flags), regardless of whether an agreement is eventually created or not.
Whatever you do, don’t wait to have the discussion until right before the ceremony. It’s not only extremely rude, but it could lead a court to invalidate an agreement put in place at the last minute as being created with undue pressure.
It might not be necessary: What a prenuptial agreement can cover depends on what kind of assets you have and where you live. Given this, existing divorce laws might already split your assets up in a way you think is fair. For example, in community-property states, the court will divide the property you and your spouse acquired during the marriage in an equal 50/50 split, while each spouse gets to keep his or her separate property. As your Personal Family Lawyer®, we can talk about how the laws in your state apply to you and your particular asset profile.
It can’t resolve issues of child custody, support, or visitation: It’s important to note that prenups can’t address certain issues related to children and divorce. For example, though prenups can help ensure your children from a prior marriage are able to inherit assets you want to leave them, these agreements cannot be used to address child support, custody, or visitation rights. Those issues must be resolved by the court, so a prenup would be useless for such a purpose.
It may require two lawyers to be valid: Prenuptial agreements may be invalidated if both parties are not represented by independent legal counsel and it can inadvertently escalate or intensify conflicts, rather than supporting you and your future spouse to get on the same page if you work with lawyers , lawyers who are not well-experienced with counseling, care, and conflict resolution.
If you plan ahead, certain estate planning tools can be used to protect your assets from divorce settlements. There are different types of trusts, for instance, that can be set up to allow you to protect assets for yourself in the event of a divorce and for your children in the event of your incapacity or death.
In fact, such planning tools may prove much more effective at protecting your assets and providing you with more control over how your assets are distributed than a prenup. In part two of this article, we’ll cover the various ways to use estate planning tools to proactively protect your assets, so you don’t need to have multiple attorneys or risk losing assets to a new spouse in the event of divorce or death.
Meet with us as your Personal Family Lawyer®, for additional help deciding whether a prenuptial agreement is the right choice for you and to discuss other estate planning alternatives that could achieve similar protections.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.