How Does a Pre-Nuptial Agreement Work?
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Prenuptials, Dowries and Marital Agreements
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In the first blush of love, no one thinks about legal agreements, but prenuptial agreements are actually as old as marriage itself. Once a contract between families in arranged marriage, enforced by tribal custom, marital agreements have always established ground rules designed to protect the interests of both parties (or families) entering into the union. Today's prenuptial agreements are more often between the two individuals directly involved but, like the old "dower" agreements, may create friction between families and disagreements between the potential partners. To confuse matters further, the validity of partnership agreements has also been recognized in some domestic partnerships where no marriage contract has been completed. In the cases of both types of agreement, its success depends on clear, skillful drafting of the document and informed participation by the parties. Like any civil contract, a prenuptial agreement depends on the good will of the couple and the courts for enforcement.
The Main Idea
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Prenuptial agreements primarily protect assets. A "prenup" establishes a starting point for the partnership and documents the agreement of the partners as to how assets will be handled in case of divorce or death of one of the partners. In states that do not legally consider assets of each spouse as belonging to both, the contract clearly documents who owns what. In "community property states" where the assets of one partner are considered common property of both spouses, a prenup can guarantee that a family trust fund or other property owned before marriage shall not figure into property settlements after divorce or be the subject of a will contested by children of a previous marriage. In fact, in today's world of extended and "second" families, the main purpose for a well-drawn prenup is to keep assets (including family heirlooms as well as monetary assets) organized after a marriage ends. "Up-front" understanding on issues concerning assets is especially important for older couples or in second (or third) marriages where each prospective spouse owns substantial assets, because they remove an excuse for misunderstanding later on.
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Other Benifits of the "Prenup"
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Premarital agreements can protect the inheritance rights of children (or grandchildren) from previous unions. It can protect the business interests of one spouse or ensure the right of inheritance of the other. Prenups can limit claims in divorce or guarantee valuation of a spouse's support during school or apprenticeship of the other. It can set out decision-making rules for end-of-life issues or whether to move for a job offer to one spouse. Although the future is difficult to predict, a prenup that covers current assets and lays out basic understandings clearly and without value-laden language can act as a moderating influence on many of the financial issues that add stress to relationships. It can also make it clear that there will be little profit in divorce and thus will act as a certifier of good intentions at the beginning of the marriage and a mediating influence if it ends.
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