To Prenup or Not

Allison Kade
Posted

Prenup-MythsPrenups: Not romantic, but neither is battling over money when you’re already heartbroken. Since the recession, more couples are opting for this once-taboo cherry on top of their proverbial wedding cake, says Sandra Schpoont, a New York matrimonial attorney and a member of the New York State Bar Association Family Law Section. Should you get one? What if you’re already married…is it too late?

What’s in a Prenup?

With their growing earning power and assets, more women are seeking prenups than ever. A prenuptial agreement is a contract that a couple signs before getting married to figure out finances in case of divorce. (Unmarried partners living together can sign a cohabitation agreement.) Prenups can cover:

  • How to split finances
  • Who gets to keep certain items
  • How to divide a home fairly
  • How debt gets divvied up
  • Financial support for a spouse who gives up a career to raise kids
  • How long a spouse and/or kids can stay in the house afterward
  • Support payments including settlement or alimony
  • Inheritance for kids from a previous marriage

Basically, anything that involves finances or possessions can enter a prenup. Schpoont remembers one client who aggressively fought for a “cheating clause”–whereby she’d be entitled to more if her husband cheated. The couple never made it to the aisle, though we applaud her pluck.

Here are the top myths about prenups:

Myth #1: Prenup Means Betting Against Your Marriage.

Schpoont doesn’t think that a prenup has to take away the romance. “Making decisions while in love usually leads to more peaceable results in the end.” Schpoont has found that divorces with prenups often limit both the bad feelings and the legal fees. Nor does a prenup increase a relationship’s chances of divorce. If anything, prenups force both parties to talk openly about their finances from the get-go, which is a great thing.

Myth #2: Prenups Are Just For The Rich.

The perception that prenups are just a way for the wealthy to protect their assets is outdated. Couples with complicated assets such as business ownership or real estate, children from a previous marriage, or one spouse giving up a career to raise children can benefit from a prenup. In addition, divorces can get pricey and these agreements minimize painful and expensive fighting.

Myth #3: Once You’re Married, It’s Too Late.

Where there’s a pre, there’s a post. The only difference is when you sign the document. Wading the emotional waters of a financial contract may be trickier once you’re married, but Schpoont says postnups can be helpful in certain cases, i.e. when a spouse starts a business with partners, or to clarify who owns a particular piece of property that is acquired. Since you’re already married, make sure you discuss the issue with open minds, as a couple. And if dragging out the lawyers seems too heavy-handed once you’re married, having a signed document between you both is better than nothing.

Is A Prenup For You?

You should definitely consider one if:

You may not want to consider pushing for one if your spouse makes considerably more than you (particularly if you live in a community property state, which allocates assets 50/50 upon divorce), or if you are both young, with relatively few assets, and make around the same amount–it’s not worth the attorneys’ fees.

Bottom Line: Prenups are nothing to be afraid of, and you should consider them an opportunity to clearly lay out financial plans in case worse comes to worst. In any case, we hope you enjoy a healthy, robust marriage—and fully discussing money plans is a great way to get there.

  • JackieAU5

    My question would be: “What about if your family has a lot of assets that would be passed down to you as well as a substancial inheritance that you anticipate down the line?” Wouldn’t you want to make sure your spouse didn’t get a piece of that? Is this worthy of a pre-nup? My inkling is yes…

  • Sara

    Personally I feel prenups make sense no matter what your financial situation. I liken prenups to insurance, you hope your house doesn’t burn down, but if it does you have insurance to protect your assets (no matter how small). When I first met my now-husband we agreed we would have a prenup.nnMy husband and I are not rich, but there were some assets and liabilities that each of us wanted documented. In his case, he may get a small inheritance one day but also has some student loan debt, and in my case I had a sizable 401k and pieces of jewelery that are very important to me. We also defined how bills would be paid. nnIn an age when divorce is prevalent I think you must come up with a plan in case of divorce. It is prudent and would make everyone’s lives easier during divorce proceedings when emotions run high.

    • http://twitter.com/alexavontobel alexavontobel

      right on sara! thank you for this post. i agree.

  • Sandra Schpoont

    Hi Jackie- Under New York state law, one’s inheritance is separate property if it is not commingled with joint assets. However every state has its own laws, and before getting married you should be aware of your particular state’s laws regarding inheritance. It is still probably a good idea to have a prenuptial even if you live in a state which considers these assets as separate property so that you can be sure that in the event of a divorce, if you have contributed some of it to a joint venture, you will be able to keep that money. Sandra Schpoont, matrimonial attorney

    • JackieAU5

      Thank you, very helpful!

    • JackieAU5

      Thank you, very helpful!

  • LauraManor

    In New Jersey, there was a new law passed over the summer that lays out certain rules the process of signing prenup must include to be enforceable at the time of a divorce. Simply coming to an agreement and signing a piece of paper with a notary sealing won’t cut it in NJ now. You need to sign off on full financial disclosure and other factors. Here’s the rundown: http://www.weinbergerlawgroup.com/blog/divorce-family-law/new-laws-governing-new-jersey-prenuptial-agreements/

  • Amanda

    If my husband and I get a divorce , I can go to court to change my prenupcional agreement

    • Sandra Schpoont

      Hi Amanda-
      No, the whole point of signing a prenuptial agreement is so that you do not have to go to court. Unless you can prove that you were coerced into signing it, (which is very hard to prove) the court will abide by the terms of the agreement.