Contrary to popular belief, prenuptial agreements (also called "prenups") aren't just for wealthy couples. Whether you're living paycheck to paycheck or you have many assets, creating a legally-binding contract that protects what assets you do have might be an excellent planning tool for your financial future. Continue reading to learn more about this type of contract and whether you should hire an attorney if you decide a prenup is right for you.
A prenuptial agreement is a legally-binding contract that details how you and your spouse will divide assets if you divorce in the future. You can cover many other financial issues in a prenup, including whether either spouse will pay alimony (spousal support) in the event of a divorce and whether you'll be responsible for each other's debts.
Generally, you will need to prepare a complete inventory of your assets and debts, and your fiancé must do the same. If you want to keep your property separate, then you can confirm that each of your separate assets will remain the property of the original owner. Prenuptial agreements are especially helpful if you have a business or other property that you owned and acquired prior to your marriage.
Every couple should tailor their prenuptial agreement to their circumstances. There's no one-size-fits-all contract, so you'll need to consider your financial and social situation before you write your contract. You can include standard terms that outline how you will split your assets, wealth, and debt after a divorce. If you have a family pet, you can also dictate which of you will keep the pet if you break up.
In today's internet-driven world, some couples choose to include a specific provision that prevents either spouse from sharing intimate details of the divorce or publishing derogatory remarks about the other on social media.
Some other terms you should consider including may be:
Whether you need a prenup depends on where you live and what you want to accomplish with the contract. For example, if you live in a community property state, the general rule is that all assets acquired during your marriage will be divided 50/50 between you and your spouse if you divorce. And typically, separate property, including gifts, inheritances, and any property you owned before the marriage will not be divided in the divorce, and you will keep what you own individually.
If you live in a community property state and you're comfortable relying on these general rules, you may not need to go through the unromantic and sometimes stressful process of drafting a prenuptial agreement.
However, if you have specific ideas of how things should be divided or if you have separate property you want to make sure remains exclusively yours after a divorce, you may want to consider a prenup. Additionally, if you're certain that neither of you want to pay alimony in the event of a break up, you may need a prenup to ensure you don't end up paying spousal support.
Every state has separate rules for prenuptial agreements. If you aren't familiar with your state law, or if you're not comfortable interpreting the rules, you should hire an attorney. In fact, in some states, each of you may be required to have your own attorneys review your prenup.
It's easy to understand that you should hire one lawyer, but why two? It's common for courts to scrutinize your prenuptial agreement, sometimes very closely. If you want your agreement to remain valid, it's wise to hire two, independent attorneys to help you and your spouse draft the ideal document. As with all legal matters, you cannot use the same attorney to represent both of you in negotiating and drafting a prenup.
If you present the court with a prenuptial agreement where only one party had an attorney, the judge may see it as a red flag. If either spouse entered into the contract without understanding the benefits and risks, which can happen when only one person has a lawyer, a court may reject the contract during divorce proceedings.
When each party had the opportunity to obtain independent legal advice about the terms of a prenup, courts are more likely to determine that each person understood what the contract stated and therefore, more likely to uphold the agreement in court.
Prenup communication can put your issues to rest before you walk down the aisle so you can have a healthy relationship for the foreseeable future. Before you employ legal services, it's critical for you and your partner to discuss the terms you both want in the agreement. In most cases, both of you want the same thing: to be treated fairly and walk away from the marriage without becoming destitute or losing your separate assets. Both spouses should be open and honest about what they want (or don't want) in the agreement.
Your attorneys will help you put your desires into the proper legal form, so your state recognizes it as a valid contract.
If you're leaning towards a prenup and you decide that hiring an attorney isn't for you, consider reading Nolo's other articles on drafting prenuptial agreements before you sign the final document.
One of the best methods of hiring a qualified lawyer is to ask family and friends for referrals in your area. Your state may also have resources to help you identify attorneys who can help you. For example, in Michigan, the State Bar of Michigan offers a Lawyer Referral Network. Potential clients can call a toll-free phone number and talk with a representative about the legal issue, and the agent can connect you with an attorney willing to provide you with a consultation for free, or at a discounted rate. Other states offer similar lawyer directories on their bar websites.
You can also visit Nolo's lawyer directory for a list of qualified attorneys. The directory contains a comprehensive profile for each attorney, including the lawyer's experience, fees, and education. Additionally, for most firms, you can read about each attorney's philosophy on practicing law. For your convenience, Nolo confirms that each listed attorney has a valid license to practice and is in good standing with the local bar association.