Prenuptial Agreements

A prenuptial agreement (prenup) can save you tens of thousands of dollars in legal fees and a difficult, time-consuming, emotionally draining legal battle in the future. It is beneficial for anyone who wants to protect, manage, or enhance their personal, family, or business assets against foreseen and unforeseen circumstances. It is also critical if you have children from another relationship. This type of agreement allows both spouses to protect their separate property, protect themselves from the other spouse’s debts, and maintain control over their income. It may also be important to decide how much support and property each spouse will receive if there is a divorce or death later.

Often people do not get a prenuptial agreement because they think it means they do not trust their spouse. This agreement benefits both spouses, as it saves both sides expensive legal fees and a difficult court battle in the future. It is much easier to resolve financial issues in a loving relationship then in the emotional and financial turmoil of a separation, divorce, or death. It may be the best investment you ever make!

When a marriage ends, by death, separation, or divorce, you can control the financial fallout with a prenuptial agreement. Without one, you relinquish that control to the government or end up in an expensive lawsuit. Divorce law and a judge dictate which assets are marital or separate and how much each spouse receives instead of the two of you deciding what is fair together, in advance.  Without a prenup, the State decides how much of your property goes to your spouse at your death, not you, even if you have a will.

If you own a house, investments, or business or have children from another relationship, you will benefit from a prenuptial agreement. If you are wealthier than your partner, earn substantially more, or if your partner has a lot of debt, you need a prenuptial agreement. If you intend to leave the workplace to raise children during the marriage, you need a prenup. Just like you shouldn’t drive down the road without a seatbelt, don’t walk down the aisle without a prenup. Both are essential protection for your future.

A prenuptial agreement should be signed well in advance of the wedding. The closer you get to the wedding date, the easier it is for someone to argue that the agreement was signed under pressure. Plan ahead.

Also, you each need your own attorney. Ideally, both parties should have an attorney review the agreement for them. One attorney cannot represent both parties for a prenuptial agreement. It is worth the investment at the beginning. If you can’t agree now, imagine what it will be like in the throes of a possibly angry and emotional divorce.

Do not use any coercion to get the other party to sign a prenuptial agreement. The agreement must be voluntary on both sides.

The Virginia Premarital Agreement Act requires complete financial disclosure. There can be no waiver of assets or support without full financial disclosure. Disclose. Disclose. Attach a list of assets and liabilities for each of you, even if one person has very little. It’s better to be detailed than to say one party is worth X amount of money. That way you have a specific disclosure for each asset, one that you may sell and reinvest and want to keep separate later.

Keep in mind tax consequences. Your spouse can inherit or receive life insurance proceeds without little or no tax consequences while other people cannot, which is an important consideration when crafting the prenuptial agreement.

Be sure to keep separate assets separate during the marriage. The best way to lose the separate identify of an asset is to commingle it. For example, inheritances are separate asses but if you put the money in a joint bank account or the asset in joint names, it could transmute into marital property.

You should consider videotaping the signing of the agreement so if there is ever a question of duress or something similar, you have video proof to show there was none.