Protecting Your Interests Before Marriage By Getting A Prenuptial Agreement

More and more couples are getting prenuptial agreements before they marry. A prenuptial agreement is a contract entered into prior to marriage where the future spouses agree to ownership and disposition of certain assets in the event of divorce, as well as to how they wish to handle the distribution of marital assets and spousal support. A prenup may not be for everyone, as it has particular advantages and disadvantages and couples should explore them well in advance of marriage.


The biggest advantage of a prenuptial agreement is that it allows parties with significant assets coming into the marriage to protect those assets. For example, if one party owns real estate or a large investment account, a prenup can allocate those assets as separate property, including all of the increases in the value of these assets during the marriage. Also, if one party currently receives stipends from a family trust or stands to inherit a large sum, the prenup can safeguard those funds as well. In essence, a prenup can wall off a set of assets coming into the marriage as the property of just one party.

A closely related advantage is the ability to keep debt with the party who brought it to the marriage. If, for instance, one party has large credit card debt or student loan debt, a prenup can assure that none of the debt will be the responsibility of the other party and that no marital funds will go to pay off that debt.

Another big advantage of the prenup: it can prevent an expensive and conflict-driven divorce, should the marriage fail. The parties can work out all of the details in advance with regard to the division of property, spousal support, and any other issues they wish to address.


But this last advantage is also a disadvantage, in that it requires the parties to lock themselves in time. If both parties come into the marriage with relatively equal incomes and agree to keep their investments separate, but in ten years one spouse has become much more successful and has a much more substantial portfolio, the separate property component seems unfair to the less successful spouse. Parties concerned about drastic change can write protections into the prenup to account for any unexpected inequity.

The most cited disadvantage of a prenup is that it sours the romance of the marriage – instead of feeling in love, the parties start negotiating a contract and focusing on money. Some just do not want to think of divorce right before getting married. And while all of these points can be valid, it does not mean that the romance goes away – it all depends on the parties and how it is presented and pursued. Being practical is not necessarily romantic but it is smart, considering what one party may stand to lose financially. Insurance is not romantic, but we need it – and a prenup is a form of insurance.

Finally, a prenup can seem to favor one party – usually the one with the greater wealth coming into the marriage. But how a couple perceives that inequity varies, and how a court will interpret that inequity will also vary. A marriage that lasts 20 years will carry more weight trying to break an unfair prenup than one that lasted only one year.

Do prenuptial agreements only benefit wealthy people?

Many people think that prenuptial agreements benefit wealthy people by allowing them to safeguard their wealth in the event of a divorce, but that really is not the purpose of these agreements. Indeed, when an agreement gives virtually all property to a wealthy spouse and essentially nothing to the other spouse, courts will scrutinize these agreements carefully to determine if they are so fundamentally unfair that they should not be enforced.

Typically, most people want a prenuptial agreement to simplify certain issues of asset distribution and spousal support. For example, parties can agree that they will waive maintenance (spousal support) but receive instead a fixed sum after a certain number of years of marriage. Or if one party has a substantial interest in a family trust or inheritance, that party will use a prenuptial agreement to ensure that it remains that party’s separate property during the marriage and in the event of divorce.

But one need not have great wealth to take advantage of a prenuptial agreement.

Consider two people, both of whom have been married before and have children from prior marriages. Assume further that both owned a house in their own name prior to meeting each other and that they intend to keep these houses after they get married but only live in one house. It is quite possible that in the event of a divorce, the spouses would want to have the availability of that other house free from any claim by the other spouse. Or perhaps the spouses want to keep the interests in the home clear so that divorce will not give that spouse an interest in the house that the respective spouses want to leave as an inheritance to their children.

In this situation, without a clear prenuptial agreement, it could be very easy for each spouse to end up losing some of the interest in their houses. They may end up commingling assets to pay for a mortgage or upkeep; they may live in one house exclusively and yet both contribute to updates to the house. Many contingencies could be listed that would create real problems for a spouse trying to keep the house totally free and clear from the other spouse.

However, with a prenuptial agreement, the spouses clearly delineate ownership and address issues of mortgage payments, upkeep, possession, use, and the like. In this way, in the event of divorce, each party has that house as it was prior to the marriage, and no future inheritance has been burdened or lessened by an interest in the home by the other spouse.

Similar situations could arise with regard to investment funds that a spouse wants to keep for his or her benefit as a nest egg in the event of divorce or simply to leave to a child. A spouse with little money can require a new spouse with wealth to assure the lesser-earning spouse will be cared for in the event of a divorce through a simple beneficiary designation on a certain investment account in a prenuptial agreement.

These examples illustrate that prenuptial agreements can serve as excellent tools for financial planning, protecting certain assets, and the intent of the parties in the event of a divorce. While people worry about “jinxing” a marriage by talking about divorce, it is well worth the risk of ending up with far less than anticipated in the event of divorce.

Should you need the assistance of an experienced prenuptial agreement attorney in Creve Coeur and O’Fallon or have questions about your situation, know that we are here to help and ready to discuss those questions with you.


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