Free Legal Advice — Why 1 Lawyer Thinks You Should Consider a Prenup
In the whirlwind of excitement leading up to your wedding day, one of the most decidedly unromantic considerations is whether or not to sign a prenup with your soon-to-be spouse. Not only is it nowhere near as fun as choosing floral arrangements or tasting cakes, it can also be uncomfortable to address the possibility of divorce, as few things dampen prewedding bliss quite like the question, "Hey, what happens if this doesn't work out?"
Still, it's wise to at least have a discussion about it and decide together, as a couple, what's right for you. We asked family lawyer Katie Kiihnl Leonard to navigate the thorny topic of prenups in the hopes of making it less intimidating.
What exactly is a prenup?
According to Leonard, "A prenuptial agreement is a contract that two parties contemplating marriage enter into prior to their marriage. A prenuptial agreement is beneficial in helping engaged couples walk through [financial] issues they may face during their marriage and how those issues will be resolved in the event of a divorce. For example, a prenuptial agreement may direct how income will be deposited, managed, and titled."
A prenup can also help couples determine how they'll manage their money during the marriage and how assets will be allocated, titled, and managed.
You should consider signing a prenup if . . .
You earn a high income or you expect to have a high income during the marriage. "A prenuptial agreement can limit (or eliminate) your liability for spousal support and can even direct that a certain percentage of your income will be your separate property (depending on how it is drafted)."
You have separate property or significant assets. "These are items you will want to protect from equitable division in a divorce."
You have already combined your finances and/or assets prior to the marriage. It's becoming more and more common for young couples to live together, purchase property, and share household expenses before getting married. "One party may have contributed more funds towards the purchase of an asset that may be titled in both names, such as a down payment in a home that the parties title in joint names (even though they are unmarried). As unmarried people, they likely have rights of joint tenants in the home, which is a legal issue. Once the parties marry, that asset is marital. The division of any equity in the home now becomes an equitable issue. A prenuptial agreement could spell out what each party has contributed and reserve the parties' respective rights to separate property once they marry."
You may not want a prenup if . . .
Your income is low, and you have a low earning potential (or plan not to work). "A prenuptial agreement could significantly limit your right to recover spousal support or marital assets in the event of a divorce, regardless of the length of the marriage or your noneconomic contributions."
Your soon-to-be spouse has significant assets compared to yours. "In that case, a prenuptial agreement will only limit your ability to recover as equitable division of property any growth of assets during the marriage, regardless of your contributions to the marriage. The prenuptial agreement could also redirect assets as your spouse's separate property that might otherwise be marital."
You plan to have children and work as a stay-at-home parent. "If you are the spouse who intends not to work and stay home, you need to be acutely aware of how the prenuptial agreement affects your rights to marital property, your spouse's separate property, and especially spousal support. In such cases, you may want to include what is commonly referred to as a 'sunset provision,' which contemplates that if you are married for a certain amount of time, e.g. 15 years or more, the prenuptial agreement will be void."
Katie Kiihnl Leonard is a family lawyer and partner with the Atlanta-based firm Boyd Collar Nolen & Tuggle.