Prenuptials. The very word makes some engaged couples shake their heads. But marriage is about love, and divorce is about money. With a 50% divorce rate and more couples marrying later in life after assets are accumulated, prenuptials (or prenups as they’re often called) make sense. Prenuptials will likely never put divorce attorneys out of business, but they certainly can make the divorce process a lot less expensive and a lot less stressful.
Celebrities are famous for their prenuptials. Our favorite celebrity prenuptial here at Parker Herring Law Group, PLLC is the one that Katie Holmes had done for her by her father (a divorce attorney). When she left Tom Cruise, their divorce was settled within a short number of months. Her prenuptial was air-tight because her experienced divorce attorney dad worked really hard on it. Normally, their celebrity divorce would have taken years to sort out, but her agreement spelled out the terms of her support and property division.
But prenuptial agreements are not just for the wealthy. A prenuptial is a contract between partners which states what assets and debts the parties go into the marriage with and how those assets and debts will be handled in the event of a divorce. The best practice is to have the prenuptial agreement attach schedules of debts and assets.
And there is a big advantage to prenulptials – the agreements force couples to talk about money and how it will be handled in the marriage. One of the leading cause of divorce in the United States are differences in how money is handled. But if you talk about that and flush it out in your prenuptial agreement now, it will be less of a problem down the road.
Here are some ground rules we use with our prenuptial clients:
-The drafting and negotiation and execution should be complete months before the wedding, not the night before or week before. Execution close to the date of the wedding leaves you open for claims of fraud and duress;
-Each party should have his/her own attorney;
-Disclosure is the key – documents should be exchanged so that each party has full disclosure on all debts and assets;
-Examine and spell out real property interests very carefully. Its not uncommon now for one party to have already purchased a home and then the parties are going to live in it together. They may later sell that property and pour the equity into a newly jointly titled asset. NC law dictates that funds put into a jointly titled real property are considered a gift to the marriage;
-Don’t forget retirement accounts; do you really want to give your spouse all of your retirement account accumulate during the marriage? And what was the retirement account worth at the time of marriage?
-Consider having your attorney videotape the meeting so that there is no question about capacity and duress;
-When you have a prenuptial agreement completed well in advance of the wedding, you can enter the ceremony clearly knowing what you are getting into in terms of debts and assets of your partner and you can focus on the celebration.