A great trend I’m seeing these days is that a lot of people are choosing not to jump blindly into marriage. They are considering the consequences. They are asking whether they need a prenuptial agreement. And they’re running into a lot of confusion.
I’m going to share with you what a prenup can do and how it can protect your assets. And you’ll learn some things that may surprise you.
Prenuptial Agreements are Estate Planning Documents
People tend to think of prenuptial agreements in terms of marriage. Actually, however, they are estate planning documents triggered by marriage. So when you’re looking for an attorney to create a prenuptial agreement, you need a legal advisor who understands estate planning rather than just family law.
Prenuptial Agreements Allow You to Change the Rules
The government in Maryland and D.C. have rules that specify what happens to your property when you die or pass away. Prenuptial agreements and other estate planning documents give you the opportunity to change the rules that apply in your situation.
For instance, unless you have a prenuptial agreement stating otherwise, the law presumes that all property you acquire during your marriage belongs to both spouses as marital property. This includes the money that you earn at work. Even though your spouse didn’t go with you to work, you are considered a single economic unit when you’re married, and half of your paycheck belongs to your spouse. That is the default position under the law.
With a prenuptial agreement, you can change that rule. You could say that unless the names of both parties are on an asset, we don’t intend for it to be a joint asset. You have a lot of flexibility to set your own rules and be intentional about matters such as ownership.
Issues You Can Address in a Prenuptial Agreement
Your prenuptial agreement could cover a lot of potential issues such as:
- How to handle ownership of your home
- Whether one spouse would receive temporary alimony or housing allowance during a separation
- Sharing interests in retirement accounts or investment accounts
- Whether certain debts will be marital or separate property
- How to handle business interests
- Whether some property will go directly to children when one of you passes away
You can’t address issues such as child custody in a prenuptial agreement. But you can include provisions to protect children you might have had before your marriage. They generally work best in combination with other estate planning documents such as a will or revocable trust.
If You Have a Business, You Definitely Need a Prenup
Business interests become very complicated in divorce. Without a prenuptial agreement, it may be unclear how much interest each spouse owns in the business, but it is very hard to exclude one partner, even if the other partner started the business before getting married. Will you continue with joint ownership or will one spouse buy out the other? What happens to the business while these issues are being decided?
The uncertainty in divorce can cause the business to come to a standstill. If the business stops operating, the value plummets. You could lose everything, and if you have a partner, they lose as well. It is important to have a prenuptial agreement or some other type of legal agreement to specify how business interests will be handled in divorce.
Get a Prenuptial Agreement Tailored to Your Specific Situation
Prenuptial agreements put you in control and can protect your interests and those of your children and business partners. But to accomplish these goals, you need to allow adequate time to consider all the issues and develop an agreement that represents a fair arrangement for both spouses.
You definitely don’t want to have one partner create the terms of an agreement all on their own and suddenly demand that the other partner sign it right before the wedding. Start early.
An experienced attorney at Carmiece Graves Law can work with you to prepare the right prenuptial agreement for your situation. Contact us for a confidential consultation to learn more about how we can protect your future.