The evening was exactly how you always dreamed it would be. You had hoped your significant other would propose marriage on a warm summer night at a fancy restaurant. Dinner felt magical as you both sat on cushy chairs, drinking glasses of your favorite wines with a tasty dinner. Gleaming candles atop a crisp, white tablecloth reflected on the nearby water. As attentive waiters served dessert, your soon-to-be spouse gave you the ring you had been eyeing. It was a special evening you will never forget.
The next day, your fiancé called with a somewhat less romantic proposal: that a Prenuptial Agreement is needed to be signed before you got married.
So, what do you need to consider for a Prenuptial Agreement? Most states require the Prenuptial Agreement to be in writing and for both individuals to retain separate legal counsel and to fully disclose their financial assets and liabilities. In order to reach an agreement, you could use mediation, collaborative law or traditional negotiation.
So what are 10 things to consider before signing a Prenuptial Agreement?
- Hire a competent attorney who is experienced in the current laws in your state and in drafting Prenuptial Agreements. If your marriage doesn’t work out, you want to make sure your rights are protected.
Don’t get advice from a friend who just obtained a prenuptial agreement as everyone’s situation is different. Money spent on a good attorney is an investment in your future.
- Fully disclose your assets and liabilities.
a. Gather up your most recent financial records for your stocks, bonds, annuity funds, bank statements, retirement accounts, the appraisal for your home, car, boat and any other costly assets, a couple of years of your tax returns and recent pay stubs. You will need to exchange this asset information with your soon-to-be spouse. In addition, you will have to create a list of your assets on a “Schedule” to attach to the Prenuptial Agreement. It will be helpful to gather such information to create a current and accurate Schedule.
b. Get all of your statements of liabilities such as credit card debt, mortgage, home equity line, student loans such as for trade school, college or graduate school, personal loans owed to family or friends, auto loan and other debt. Make a list of your liabilities for your Schedule.
- Print out two copies of your documents of your assets and liabilities (one for your attorney and one for your soon to be spouse’s attorney) or gather documents in an electronic file for them.
- Determine if you want the Prenuptial Agreement to apply to divorce, separate support and inheritance-related matters. You will need to figure out what is Separate Property which each of you have owned before your marriage and will remain Separate Property and which will be Marital Property. Discuss options with your attorney.
- Depending on your financial circumstances and if you are seeking your soon to be spouse to waive assets or income in the Prenuptial Agreement, consider options such as paying some money or assets to your fiancé after periods of time that you are married, if you have considerably more assets and income than him or her. Alternatively, if your financial needs are greater than your fiancé, consider seeking some money or assets from your soon to be spouse after being married for a period of time, if the waiver of assets or income is sought. Another option would be to have the Prenuptial Agreement end after a long term marriage, which is having a sunset clause.
- Think about if you want to waive alimony. Sometimes, it may not be a good idea to waive alimony as you don’t know what will happen in the future. Your needs may change, such as if you will have children and one of you will stay home with the children, if you become unemployed with no job prospects or if you become unable to work. Paying alimony could be a tax deduction in the future, so you may want to talk to your attorney and accountant about it.
- Remember you can’t waive paying child support for children in a Prenuptial Agreement as it is against public policy. Children need to be supported.
- Determine whether a family member or close friend has named you as a beneficiary to inherit money, real estate, stocks, etc. and discuss with your attorney about disclosing that in your Schedule.
- Do not send any tax returns, retirement funds, pay stubs, bank statements or any other asset or any statements containing of your liabilities which has birth dates, social security numbers, account numbers in an unencrypted e-mail to your attorney or to your soon to be spouse. Protect your online security. Use encrypted software to send the information or put it on a flash drive with a password.
- Make sure the Prenuptial Agreement is signed at least thirty (30) days before your wedding day and not the day before your wedding as you want to make sure that it will hold up in court.
To sum, make sure you get good legal advice from a competent attorney, consider what is the best process for you such as using mediation, collaborative law or traditional negotiation in creating a Prenuptial Agreement, make sure you have full disclosure of your assets and liabilities and have it signed in plenty of time which is at least 30 days before the wedding day. Hopefully, you will never need to use the Prenuptial Agreement, but if you do, you will have it in case the marriage does break down.
This article is not meant to provide legal advice, but is for informational purposes only.