MARRIAGES & PRE-NUPTIAL AGREEMENTS
- Pre-Nuptial Agreements:
Nobody wants to consider the possibility of their happily ever after fairytale marriage ending, but prior to saying “I Do,” couples may want to consider the worst case scenario. For couples where one or both parties have significant assets prior to marriage, they may want to execute a pre-nuptial agreement to protect their interests in the event of a divorce. If you are considering marriage, here are a few provisions that pre-nuptial agreements may include to protect your assets and interests in case of a divorce:
- Non-marital assets: Any property that you own prior to the marriage is considered separate property. However, if the value of the property increases during marriage, you make improvements to the property, or you sell the property and use the funds for a new property or investment, the Court may decide that it has become marital property. A pre-nuptial agreement can set forth how your assets remain separate despite changes or appreciation in the event of a dissolution of marriage.
- Lawyer’s Fees: Parties may negotiate that in the event of a divorce proceeding, both parties waive their right to attorney’s fees from the other party.
Alimony: Parties may negotiate that in the event of a divorce proceeding, both parties waive their right to alimony. This does not include temporary support—Courts may still order temporary support regardless of a pre-nuptial agreement. Additionally, in lieu of a waiver, parties may negotiate lump sum settlements for parties depending on length of marriage and financial circumstances.
- Pets: As custody of pets can become a particularly litigious area of divorce proceedings, parties may negotiate in a pre-nuptial agreement who gains custody of a pet, particularly one that was acquired by one party prior to the marriage.
- Debts: If either party enters the marriage with debts, the pre-nuptial agreement can protect the other party by maintaining it as a separate liability regardless of contributions. Additionally, the agreement may negotiate that any liabilities incurred during marriage solely by one party remains the responsibility of that party only upon dissolution of the marriage.
- Marital assets: Parties may determine in a pre-nuptial agreement how assets obtained during marriage may be distributed in the event of a divorce. A couple may agree on a lump sum payment to one party, guaranteed opportunities for buyouts of property for a party, or a percentage distribution of assets.
- Children: The Court WILL NOT recognize any agreement by the parties as to child support and custody. This cannot be negotiated in a pre-nuptial agreement.
Retirement and Pension: Parties may negotiate to keep retirement funds, pensions, and investments established before marriage separate property in the event of dissolution regardless of appreciation and continued contributions.
- Marital Expenses: Pre-nuptial agreements may outline which party is responsible for normal living expenses, payment and upkeep of the marital residence, and contributions by both parties to expected expenses. Additionally, it can outline expectations for contributions, including whether the parties will have joint or separate bank accounts and whether the parties are both expected to contribute financially to a joint marital residence.
- Testamentary Desires: Although this provision is superseded by subsequent wills, the pre-nuptial agreement can outline the distribution of assets to the spouse in the event that one party dies during the marriage.
Prenuptial Agreements may include these provisions as well as provisions that protect very personalized areas important to individual clients such as social media concerns, inheritances, and businesses owned by one or both parties. Ultimately, while couples do not want to consider the possibility of a marriage ending, they are often better having a prenuptial agreement and not needing it rather than someday needing it and not having the prenuptial agreement.