The Prenup Question

An Important Consideration

  • Wealth Planning

The Prenup Question: An Important Consideration


Getting married is one of the most consequential events in a person’s life, for many reasons. One of which is that marriage is a merging of finances and assets between two people, a legally binding contract. Prenuptial agreements protect both sides in the event of dissolution of this contract.

For couples who have separately amassed or inherited wealth prior to marriage, particularly those in which one partner has significantly more wealth and asset accumulation than the other, prenups are important acts of foresight and protection. In addition, a marriage may be more likely to succeed when there is less ambiguity about what happens to one’s financials and other assets in the event of a divorce. Both parties know what’s on the table and where they stand.

Part of wealth building is wealth preservation. A divorce should not have to erode or significantly diminish that.

This may be why people are getting them more and more. Recent surveys by the American Academy of Matrimonial Lawyers have seen a significant rise in prenuptial agreements with the most notable increase in prenups being among millennials. Here are some of the most significant reasons why, along with some serious considerations about how to (and how not), to go about the prenuptial agreement process:

  • It’s Nobody Else’s Business. If you built a business or a brand on your own, you should be entitled to keeping that company in your own hands. Of course, you could choose to literally share the wealth if your spouse or engaged partner becomes a contributor to your business in a distinct or tangible way. But in either case, you may want to delineate these matters up front with an attorney and your prospective spouse about how much of your company will always belong to only you – or not – and that includes physical and intellectual property.
  • When Mergers Become Acquisitions. Assets acquired during the marriage are shared marital property in many states, and that includes those not realized until later, like stocks, bonds, and other investments. The building of future wealth – which may or may not materialize during the marriage itself – may still require additional provisions to protect it.
  • Keep It Real. There are limits to what you can expect a prenuptial agreement to protect. Prenups vary from state to state, and in some situations can be rendered invalid even if they weren’t created under veritably legal circumstances or for dubious reasons. For example, judges don’t like prenups that were created under what they perceive as “duress.” You don’t want to have a prenup signed two days before the wedding. That may not hold up in court.
  • Be Transparent. Don’t hide anything. Offshore accounts and stowed-away assets will only complicate a divorce settlement and in some states could result in the prenup being set aside.
  • Making Sure the Kids are All Right. One of the smartest moves you can make to ensure that your children will still inherit your property, no matter what else happens, is to have a well-drawn agreement that makes your wishes loud and clear. Without a prenup, the divorcing spouse could have the rights to what you intended to go to your kids.
  • Prenups Aren’t for Kids. Child custody and support are not the domain of the prenuptial agreement. Do not try to use prenups as leverage to influence who will or will not get custody of the kids.
  • Get Your Own Counsel. We know: awkward. Not the most romantic way to negotiate an already un-romantic discourse on the way to the alter. But, again, it’s a seatbelt. And seatbelts are only made for one person. You want an advocate who doesn’t have an emotional investment and who is always on your side, protecting your best interests. In some states, the whole agreement may be invalidated if there is not separate counsel.
  • Take Your Time, Do It Right. You might want to get it over with, but don’t rush this process. You want to make sure you have included everything this document needs to protect. And you want to spend a lot of time thinking clearly and unemotionally about these details. Also, stay away from the online versions. Retain an attorney who is an expert in this field to keep things on the level. Lastly, you want to make sure that your significant other-to-be is as fluent in and satisfied with the language as you are.

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