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Premarital Agreements


So many people view Premarital Agreements, also known as Prenuptial Agreements, negatively. I see them as a helpful tool for couples who want to go into marriage with their eyes wide open.


If a couple is considering marriage, but has concerns due to one spouse's significant assets or potential to receive a large inheritance, debts, a liability concern due to a business, or children from a prior marriage, it would be good to discuss and craft a premarital agreement that addresses the concerns and lays out what would happen in the event of divorce or death. These are not easy conversations, but I consider them critical.


More people at every age are losing a spouse to cancer or sudden death. With our aging population, adult children are often anxious if a widowed parent wants to remarry, especially if the second spouse is significantly younger or has their own children from a prior marriage. Negotiating and drafting a premarital agreement that addresses concerns may put more people at ease than just the two getting married.


Premarital Agreements may address many issues including:

  1. Confirming separate property of each prior to marriage
  2. Deciding whether income off the separate property will be community or separate property
  3. Determining how future earnings during marriage will be addressed - will they be considered community property or separate property?
  4. If there is a divorce, will alimony be paid? Will it be based on the length of the marriage?
  5. Deciding a business will stay separate property of one spouse if there is a divorce
  6. Determining the rights of each spouse to sell, transfer, or manage certain assets


If a Premarital Agreement is signed, it is also important to have the couple sign a Marital Agreement shortly after the marriage to confirm that agreement. There are certain rights that you can only give up under the law if you are married.


To ensure that the premarital agreement and marital agreement will be honored in the event of a divorce, both parties should be represented by separate counsel. Each party must sign voluntarily and provide a fair and reasonable disclosure of property and financial obligations to the other party.

 

Marital Agreements


For a variety of reasons beyond confirming a premarital agreement, married couples may decide to set out in a Marital Agreement how they wish to characterize the property they have acquired during their marriage. They may decide to negotiate a Marital Agreement due to one spouse's recently-acquired significant inheritance. Perhaps the spouse who inherited feels strongly that the income on that separate property not be considered community property. Or perhaps both spouses agree that a marital agreement should be done because the other spouse has a profession that makes him/her a target of lawsuits. It could even be that the couple's financial advisor or accountant suggested they consider a marital agreement. Again, it is imperative that each party be represented by independent counsel so that the agreement will be upheld in the event of divorce will be upheld in the event of divorce or in the event of one spouse’s death to protect the surviving spouse from potential misunderstandings with deceased spouse’s children.


Working with an attorney for such matters that is trained in the collaborative process should help you find the attorney who will advocate on your behalf without creating unnecessary stress for you and your significant other.