Prenuptial agreements have an image problem. We think they’re unromantic and, on that score, it’s hard to argue. However, other perceptions are not as accurate. Take these, for example:
“A prenuptial agreement gets couples off to a rocky, unhealthy start.”
“Prenuptial agreements usually involve one party taking advantage of the other. Prenups are almost always unfair”
“Such agreements usually involve deception and hidden assets.”
“Only rich people want or need prenuptial agreements.”
These perceptions are not as accurate. To understand, meet some people who should consider having a prenuptial agreement…and why:
Most soon-to-marry couples might think not having a prenuptial agreement means there is no plan in place should they divorce. Not true. There is a plan in place. Unfortunately, it’s the state’s plan, based on the state’s sense of what is fair.
As it turns out, in North Dakota, hardly anyone thinks the state’s approach makes sense. For example, in North Dakota, the estate that you inherited—or might someday inherit—is at risk of being distributed to your spouse.
Unlike other states, North Dakota doesn’t protect inheritances, and doesn’t require divorce courts to award those assets to the inheriting spouse. Minnesota does protect such assets, but not with 100% certainty.
Is your son or daughter getting married soon? Do you want to make certain that their partner doesn’t end up with all, or part of, the estate you leave behind? Then talk to them about the need for a prenuptial agreement.
Without an agreement in place, if you divorce your second spouse, those assets might well end up going to him or her. Then, in time, your assets will make their way to your new spouse’s children, not yours.
Even if your second spouse has no desire to claim any portion of your premarital estate, your kids might still suspect it. Resentments might brew and fester. A prenuptial agreement might help keep family peace.
All those years you spend at home free your spouse to increase his or her earning capacity. If the marital partnership ends, should only one partner end up with 100% of that “asset”? If so, your partner’s post-divorce net income will continue its upward arc. Yours may flat-line…or worse.
A prenuptial agreement can provide essential protection.
For example, do you make your living from the farm land and implements you own? Do you make money from any kind of self-employment assets? Well, when you divorce, you may need to “buy” those assets again. This time, though, your payments will be to your ex.
A prenuptial agreement can provide protection against the unforeseen consequences when your partner engages in such unhealthy behaviors.
Will all of your income, and his, be deposited in one account? Or will you keep your respective earnings in separate accounts?
Will your income be devoted to payment of household expenses, while hers is saved and invested?
Do you have the same standard of living expectations? Have you considered what your monthly budget will be? Do you have net worth goals? Savings goals? Charitable giving desires? Does your partner share them?
Even though having “the prenup talk” might be hard, it might well be one of the wisest, healthiest conversations you ever have.
Well, here’s a secret. Cases whose outcomes are predictable do not go to trial! After all, who would spend tens of thousands of dollars to find out how a judge will divide their estate, when they already know the answer?
In other words, prenuptial agreements can go a long way to making a divorce more peaceful, more predictable, and more affordable.
What Can’t a Prenuptial Agreement Do?
Prenuptial agreements anticipate, essentially, two concerns: (1) How to contend with financial issues as part of a divorce; and (2) How to distribute assets in the event of a spouse’s death.
There are, however, issues that are beyond the influence of a prenuptial agreement, things it cannot do.
For example, spouses-to-be cannot pre-decide who will take custody of children in the event of divorce. Likewise, they can’t decide the shape, scope, and conditions of the other’s visitation. The Court retains authority to make final decisions about such matters, and a marrying couple cannot, by agreement, remove it.
Likewise, a couple can’t use their prenuptial agreement to establish child support amounts in advance or to waive that obligation entirely. Our law requires child support to be set according to specific guidelines and to change to specific amounts when the parties’ income changes. Parties cannot agree to terms different than the State’s.
So, how do you craft an enforceable prenuptial agreement? What must be done so it will survive a challenge when the time comes?
Here are the basic requirements:
Again, this is pretty important stuff, too important to leave to a one-size-fits-all online form, or to any old lawyer. You want your agreement to contend properly with your circumstances. That means working with a qualified family law attorney, familiar with divorce and estate-planning considerations.
Congratulations and best wishes for a long and happy marriage! But consider a prenuptial agreement…just in case.
Mike founded Gjesdahl Law, P.C. in 1989. His practice is exclusively devoted to families, their transitions, their needs. Throughout his career, he has confronted every imagin…
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