There tends to be skepticism when it comes to prenuptial agreements.
Many consider it unromantic, which is not the tone couples are hoping to set as they embark on their new lives together. There is also a sense that such agreements are only necessary when the two individuals involved have disparate wealth backgrounds.
Birmingham Prenuptial Agreement Lawyer Steven Eversole of Eversole Law LLC believes it's important to dispel these myths because in reality, these agreements can be highly beneficial for many people in a wide range of circumstances.
Not only are they helpful in the event of a divorce, they may in some ways help maintain peace within the union.
What Is a Prenuptial Agreement?
A prenuptial agreement is referred to in Alabama as an “antenuptial agreement.” For short, sometimes it's simply called a “prenup.”
It is a contract signed by the bride and groom-to-be prior to entering a marriage contract that spells out the rights of each individual in the event of a divorce. Typically, the central focus in a prenuptial agreement is divisions of assets and allocation of debts. Also typically noted is whether one spouse will pay the other alimony or spousal support, and how much.
It can drive down the cost of a divorce (which in turn helps to preserve those assets and prevent you from racking up further debt) because many matters that might otherwise be litigated are already settled.
Historically, prenuptial agreements were primarily sought by celebrities or markedly wealthy spouses seeking to protect his or her estate or assets from less successful partners. However, this is no longer the case, as people from all walks of life have come to recognize there is much value in these contracts.
Who Should Get a Prenuptial Agreement?
Any couple who brings personal or business assets into a marriage can benefit from a well-written prenuptial agreement either drafted or reviewed by an experienced family law attorney.
These contracts eliminate the possibility of surprises in the event of a divorce, and also spell out the expectations of those involved.
Because these contracts require full financial disclosure in order to be valid, couples begin their union as an open book. Each has a full understanding of the other's economic status – which is more than we can say for the way many other marriages start. Numerous studies have revealed arguments over money are the No. 1 predictor of divorce, and that is for both men and women, regardless of income and education. Financial disclosures made at the outset can help to limit these kinds of arguments.
A prenuptial agreement may also persuade those with one foot out the door to reconsider, knowing the exact financial ramifications of leaving. That's not to say one should stay in a bad marriage solely for financial reasons, but it can be motivation for those on the fence to at least try.
Some of the most common scenarios for which we would generally recommend a prenuptial agreement:
- One partner is much wealthier than the other. A prenuptial agreement may limit the amount of alimony payable, and also helps to ensure your partner is marrying you – not your money.
- One partner is much poorer than the other. A prenuptial agreement can help ensure the weaker partner is protected.
- This is a second (or subsequent) marriage. People who are remarrying find their financial and legal concerns are quite different from those entering a first-time marriage. There may be children from a previous marriage, support obligations, another home and a substantial amount of existing assets. A solid prenuptial agreement can make sure, in the event of your death or divorce, your assets are distributed as you want, and that neither the first or subsequent family will be slighted.
- Your partner has a high amount of debt. Stipulations in prenuptial agreements can ensure you won't be responsible for that debt in the event you divorce.
- You own a business or part of a business. This is to protect your company from being upended in the event of a divorce.
- You own an estate/inherited property. While inherited property and that owned prior to marriage is generally considered separate property, you may want to get it in writing to ensure the court doesn't commingle it.
- You plan to exit the workforce to raise a family. This can be an excellent choice for a family, but it will inevitably negatively impact the stay-at-home-parent's income and wealth. When there is a prenuptial agreement, both partners ensure they will share that burden fairly.
Are Prenuptial Agreements Enforceable?
Generally, the courts will enforce prenuptial agreements, assuming they are fair and reasonable and meet certain criteria.
All agreements should be signed by both spouses, and each must disclose all assets and debts. That could mean attaching financial statements to the agreement to ensure this has been done and there is no question later.
Each spouse should have their own family law attorney to ensure their interests are protected. The court also needs to be assured each spouse entered into the agreement voluntarily and freely and with competent legal advice.
Finally, it's worth noting that any premarital agreement pertaining to child custody, child visitation (parenting time) or child support generally is not going to be honored. Instead, the court is going to take into consideration what is in the best interests of the child or children involved.