A prenuptial agreement, also known as a "prenup," is a legally binding agreement couples enter before marriage that outlines the division of assets and debts in the event of divorce. In this blog, we discuss who needs a prenup, how to discuss creating an agreement with your partner, and what the consequences of not having a prenuptial agreement are.
Who Needs a Prenuptial Agreement?
A prenuptial agreement can be beneficial to you and your partner for a variety of reasons. Common reasons people consider creating prenuptial agreements include:
Having a blended family. When marrying for the second time or more, especially when children are involved, a prenuptial agreement can protect the interests of all family members. It can ensure that specific assets are passed on to the children from previous relationships, maintaining their inheritance rights.
Being a business owner or high-net-worth individual. For individuals with substantial assets or those owning a business, a prenuptial agreement can help protect these assets from being divided in the event of a divorce. It can prevent the disruption of business operations and protect the interests of other stakeholders as well.
Wanting to avoid litigation (in the event of a divorce). A prenuptial agreement can simplify the divorce process by predetermining the division of assets, thus minimizing the need for litigation and potentially lengthy court battles. It is important to note, however, that prenups can be challenged in some cases. You should consult with an attorney when drafting a prenup, as they can help ensure the agreement is enforceable.
Having different financial goals or beliefs. If partners have different spending habits or financial goals, drafting a prenuptial agreement can promote financial transparency and understanding; both parties are also provided protection from future debts or liabilities. You can also clarify potential financial obligations that either party has. For instance, if one party wants to continue their education, the agreement may clarify that all tuition-related expenses are their own responsibility.
Do Middle-Class People Get Prenups?
Many people often ask if “normal people” or those in the middle or lower financial class get prenuptial agreements, and the answer is yes. Even if you are not a celebrity or CEO at a hedge fund group, you can and should get a prenup. Your class has no bearing on whether you should create such an agreement.
What Happens If You Don’t Make a Prenup
While it may seem unromantic to discuss the potential end of your relationship before your marriage, it is essential to consider the potential legal and financial implications of not having a prenuptial agreement. Without a prenuptial agreement, you risk the following:
Uncertain division of assets. If you do not have a prenup, you risk having your assets divided based on the state’s law. California is a community property state, which means the court will divide marital assets equally between spouses.
Debt liabilities. Without a prenup, you could be liable for your spouse's debts incurred before or during the marriage. A prenuptial agreement can protect you from being responsible for these debts in the event of a divorce.
Spousal support. Spousal support, also known as alimony, can be a point of contention during divorce proceedings. Without a prenuptial agreement, the court decides who pays alimony and how much based on factors like the length of the marriage, the income of each party, and the standard of living during the marriage.
Discussing Whether You Need a Prenup with Your Partner
People often believe that prenups indicate a lack of trust in a relationship. This harmful myth makes people wary about asking their partner for a prenup. While initiating a conversation about prenuptial agreements can be a delicate task,
Discussing a prenup requires sensitivity, honesty, and open communication. If you are considering a prenup, to start the conversation, you might consider highlighting the benefits of having a prenuptial agreement and explaining your reasoning for asking for a prenup.
Addressing the reasoning behind wanting a prenuptial agreement allows both partners to understand each other's perspectives, personal values, and concerns related to financial security. It promotes transparency and builds trust, as it involves sharing your views on assets, debts, and financial expectations.
Here are some tips additional tips on how to approach this discussion:
Be mindful of your timing. Start the conversation well before your wedding day. This provides ample time for discussion and negotiation without the pressure of an impending wedding.
Be mindful of where you have the discussion. Choose a comfortable and private setting where you can discuss the matter without interruptions.
Be open to a conversation. Listen to your partner's concerns and be willing to compromise and discuss each of your concerns.
Speak with Our Prenuptial Agreement Attorneys
The Neshanian Law Firm, Inc can help you draft a prenuptial agreement. Whether you are the party requesting the agreement be drafted or have been asked by your future spouse to create such an agreement, our legal team can advise you of your legal rights and options.
To request a case consultation, contact our team online or via phone (949) 577-7935.