When you decide that you want to marry someone and that you will share your lives with one another, the romantic love that you feel is often the most captivating emotion you have ever experienced. And as your wedding day approaches, perhaps the furthest thing from your mind (and your heart) is the idea that your marriage is not only a romantic relationship, but is also a business relationship.
But of course, marriage throughout history has been an arrangement of sharing property, while the romantic aspect of marriage is a relatively modern development. Contemporary marriage, in short, is an agreement involving your joined emotional and financial futures, both your passion and your property.
This dual nature and purpose of marriage has led to the increased acknowledgment that a prenuptial agreement (also called an antenuptial agreement) is useful to protect each spouse’s financial interests.
Now, most people associate a prenup with the possibility of divorce. In addition, prenuptials are often viewed as unromantic, uncaring contractual documents that contradict the romantic aspect of marriage.
All of this stigma can cause what’s known as the prenuptial agreement dilemma; a difficult choice between making a marriage practical and keeping it romantic.
However, many (if not most) prenuptial agreements are written not in anticipation of divorce, but in anticipation of death. And taking care of your surviving spouse after your death is arguably one of the most romantic, responsible actions you can take.
Moreover, rather than "doomsaying" documents that foretell an acrimonious divorce, prenuptial agreements can actually bring harmony to your marriage by settling financial issues and keeping them from creating conflict during your life together and afterward.
A pre nuptial agreement, however, is not right for all couples. If you and your soon-to-be-spouse were not previously married, are just starting out your careers, and have neither children nor any substantial assets, then a prenuptial agreement may not be necessary.
For everyone else, though--and especially people in their 30s or older with any substantial assets, children, or a former spouse--a prenuptial agreement is strongly encouraged.
Prenuptial agreements are particularly useful for people who are entering into a second marriage. In the case of remarriage, one or both spouses may already have significant assets, and may want to arrange that family members from the first marriage inherit property and assets.
Once you are remarried, in fact, your new spouse has an automatic entitlement to part of your assets, unless estate planning documents, such as a prenuptial agreement, create other arrangements.
A prenup is also a good idea if the newly married couple have a large difference in age or financial status. The spouse with the majority of the assets will want to protect those assets and control their distribution, while the person with fewer assets will want ensure receipt of some of the marital property in case the marriage ends due to divorce or death.
A prenuptial agreement is valid only if it is created under two conditions:
1) There must be "full disclosure" between the two parties, in order that there will not be a finding of fraud, misrepresentation, or duress (a finding which would invalidate the prenuptial agreement). Both you and your spouse must thoroughly disclose your financial details: income, assets, and liabilities, in the document.
2) Each spouse must individually be represented by separate attorneys prior to signing the prenuptial agreement, again to reduce the risk of drafting and agreeing to an unfair agreement
Once each of the two conditions above are met, and the contents of the prenuptial agreement are satisfactory to both parties, you and your spouse each need to sign the prenuptial agreement, and the prenuptial agreement must be notarized.
It is advisable not to wait until the last minute before your wedding to try to draft and execute a prenuptial agreement. Creating an effective and fair prenuptial agreement requires a substantial amount of time and planning.
Waiting until right before the wedding only increases the likelihood that the prenuptial agreement will be unsatisfactory to one or both spouses. It also increases the likelihood that one or both spouses will sign the prenuptial agreement under duress.
Again, it is important to remember that a prenuptial agreement is not just a document that protects and distributes assets in case of divorce. It is also a document that protects and distributes assets in case one of the spouses should die. Thus, the prenuptial agreement is not the exclusive tool of the divorce attorney, but is also used by the estate planning attorney on a regular basis.
If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township, Bloomfield Township, and the surrounding Michigan areas.
Schedule your Free Consultation today: (248) 398-4665.Return from the living trust article to the Home page by clicking here.