The Truth About Prenups

There are many myths surrounding prenuptial agreements, hopefully this introduction can dispel some of them.

Myth # 1. Prenuptial agreements are only a mechanism to protect the wealthy spouse’s assets.
Not true. Although it is true that prenuptial agreements can prevent one spouse from taking the other spouse’s assets BUT for a prenuptial agreement to be enforceable it must be “fair and reasonable” as adjudged by a competent court of law. Prenuptial attorneys are intimately familiar with what provisions are likely to be considered “fair and reasonable” and held valid at the time of the prenup enforcement.

Myth # 2. Prenup contracts must spell out every possibility in divorce.
Not true. The circumstances surrounding death or divorce are so vast that no single document could conceive of all the possibilities. A prenuptial agreement can be as detailed or as general as the couple wishes. The agreement is basically a contract between two consenting adults and therefore wide latitude is granted in the terms of the agreement. There are, though, several areas where clauses are per se invalid. For example, provisions affecting child support or child custody, clauses that “encourage divorce,” and issues related to religion usually will not be upheld. A prenup lawyer can discuss which provisions will likely be upheld and how to incorporate such goals into a valid prenuptial agreement.

Myth # 3. Prenuptial agreements last as long as the marriage.
Sometimes. However, many prenup contracts automatically expire after a certain number of years, or expire if the amount of property given to the parties is modified at certain benchmarks. Sometimes ‘scaled’ prenuptial agreements allow the couple to build financial trust over the course of their relationship. After twenty years, for example, the prenuptial agreement could become totally obsolete. The parties may also modify the prenuptial agreement during marriage by mutual consent.

Myth # 4. It is unnecessary to retain a lawyer to draft a prenuptial agreement.
Sometimes. There are multiple websites that provide inexpensive prenups (for example, Law Guru, Legal Zoom, etc.). These can be an excellent starting point, and possibly, it could suit some individuals’ needs. Remember, however, that divorce litigation is MUCH more expensive than obtaining a well-drafted prenup contract by a prenup lawyer. The distribution of property is much simpler and quicker when a valid prenuptial agreement exists. Furthermore, having an agreement in place allows the couple, not a judge, to determine their own property rights at a time when they are in love as opposed to the heated time of separation.

Not all premarital agreements are of equal complexity. A very simple prenup could likely be created without counsel, but anything more requires the attention of skilled prenuptial attorneys. Often times couples fail to realize crucial areas to address in their prenup. For instance, a well-drafted prenuptial agreement may be structured in a way that protects both parties from unnecessary federal and state tax liability. A prenup lawyer can also address the complex issues surrounding second time marriages, death, and pre-existing children. It should also be remembered that each state varies in their prenuptial and premarital agreement laws (most have adopted the Uniform Premarital Agreement Act (UPAA)) and a local prenuptial attorney will be intimately familiar with these idiosyncrasies. It is extremely important to remember that a poorly drafted agreement may not be upheld at the time of enforcement. One of the many pitfalls is not in the drafting of the agreement (which can be very complex) but also in the process of creating an enforceable agreement. If either the process or the provisions of the prenuptial agreement are lacking, the agreement runs the risk of being unenforceable.

For these reasons, it is crucial to obtain a competent prenuptial lawyer at the very least to review the prenuptial agreement before marriage.