Prenuptial Agreements…Should I Sign on the Dotted Line?
Though the term prenuptial agreement or “prenup” screams celebrities and the ultra-wealthy, that really isn’t the case anymore. As couples marry later and bring assets to the marriage, prenuptial agreements have become more commonplace. Whether you’re talking about a prenuptial agreement created before the marriage, or a marital agreement created after the marriage, the objective is the same… to clear up any ambiguities as to how assets are divided if the marriage ends.
So let’s start with a good definition: A prenuptial agreement is a contract entered into before marriage. This agreement commonly includes provisions for division of property and spousal support in the event of divorce, separation or death. It may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery. Most importantly, a prenuptial agreement can preserve the nature of property in the event the marriage ends. In other words, separate property can remain separate, instead of being subject to community property or equitable distribution laws. Marital agreements are similar with the exception that they are entered into after the couple has married.
Who may benefit from a prenup?
There are many reasons why a couple chooses to create a prenuptial or marital agreement. The following are the most common scenarios:
- One spouse comes into the marriage with significantly more assets than the other
- One spouse has a lot of personal debt (credit cards, student loans, mortgages, etc.)
- One spouse is the owner or partial owner of a business
- One spouse earns significantly more income than the other
- One or both spouses have retirement benefits or employment benefits such as stock options or profit sharing
- One or both spouses have children from previous marriages or relationships
Benefits of a prenuptial or marital agreement
Though it does not seem romantic to discuss the end of marriage before it even begins, irreconcilable difference over finances is one of the main reasons for divorce. Taking the time to talk to your spouse about property, marital assets, and finances may benefit your marriage in the long run. Some benefits of a prenuptial agreement include:
- documenting each spouse’s separate property to protect it as separate property in the event of a divorce
- supporting your estate plan to ensure that specific assets go to biological children and are not considered marital property
- distinguishing between what is marital and what is commingled property
- documenting and detailing any special financial arrangements between you and your spouse
- avoiding the time and expense of extended divorce court proceedings and reducing conflicts during a divorce
- establishing procedures and rules for issues that may arise in the future… since none of us has a crystal ball
- assignment of debt, such as credit cards, school loans, and mortgages, to the appropriate spouse to avoid both spouses sharing debt liability.
A prenuptial or marital agreement can’t include issues surrounding custody, visitation, or child support. The Virginia court has the final say based on the best interest of the child. It also cannot include personal preference or domestic items, like who will wash the dishes or where the family will spend Thanksgiving. A prenuptial agreement is designed to address only financial issues. The court can set aside any provision that it finds unfair or not in the interest of justice. The most commonly set aside provision are spousal support agreements and spousal support waivers.
The prenup checklist
The following is a checklist of topics to discuss when preparing a prenuptial or marital agreement:
- Deciding what is separate and what is joint property
- Management of household bills
- Management of bank accounts (joint, separate, both)
- Management of credit cards and payments
- Investment accounts
- Estate planning
- Retirement benefits
- Beneficiary designations on life insurance and other accounts
- Debt (yours, mine, and ours)
- Income deductions, claims, and filing tax returns
- Financial arrangements for putting a spouse through college
- Spousal support
- How future disagreements will be settled (e.g. mediation)
Contact a Virginia family law attorney
Every prenuptial or marital agreement is unique. A prenup is a legal and binding contract that is not easily overturned. “I didn’t read it” or “I didn’t understand it” or “He wouldn’t marry me if I didn’t sign it” are not excuses once the document has been signed and witnessed. It’s important that you consult with a Virginia family law attorney to understand your rights before you sign any document which may affect your future. A judge always has discretion to throw out all or parts of a prenuptial agreement if it is found to be illegal or unconscionable. The contract will be deemed valid if:
- The prenup was signed before the date of marriage
- Each person entered into the prenuptial agreement voluntarily
- The agreement was substantially fair to both parties;
- Each person’s disclosures were honest
- The contract will lead to an equitable result in the event of divorce.
About Melone Law, P.C.
Melone Law, P.C. is a general practice law firm and serves Virginia Beach and the Northern Virginia area. Our practice areas include Family Law, Divorce and Special Needs Children, Traffic Ticket Defense, DUI/DWI Defense, and Trust and Estate Law. Our philosophy is to provide all of our clients with the highest quality legal representation, innovative legal solutions, and unsurpassed dedication to customer service. Through our high standards, we strive to be a trusted resource to our clients.
We know from experience that a successful attorney-client relationship depends on our ability to understand your needs and objectives. For more information about prenuptial and marital agreements, contact our office today at 703.995.9900 in Northern Virginia or 757.296.0580 in Virginia Beach, or visit our website: www.MeloneLawPC.com.