Falling in love is an exciting thing, with happy feelings and a sense of hope and blissful appreciation for the future. However, a variety of studies show that many millennials have a deep belief that even a marriage that they expect to enter into and be happy in “for a long time” may not be forever. Perhaps it is that divorce became more normalized in the generation before millennials and thus, there is no longer a social or cultural norm that causes this generation to believe that ending or getting out of an unhappy relationship. Nonetheless, an overwhelming super majority of people getting married would indicate that nothing about their anticipated nuptials is guaranteed, not even a happily ever after. For this current generation, there is a belief that if one day, the marriage ends, it is better to proactively negotiate and plan for the escape plan from the relationship. Thus, couples are obtaining prenuptial agreements in record numbers, recognizing that an advance agreement can save substantial money, frustration, emotions, time investment and even stress. Perhaps because many millennials have heard the awful stories of couples waging long-term wars in divorce court, they are motivated to make sure that they have a deliberate plan to avoid even the potential for that type of outcome. These couples are trying to be proactive and intelligent about significant level costs, attorney fees and a long, stressful and emotional process that could take years to complete. When couples cooperate to obtain a signed, legally enforceable prenuptial agreement, they can quickly, easily and painlessly divide their assets, understand their financial obligations and move on with their life. Perhaps more importantly, by negotiating and signing a prenuptial agreement, it also allows couples to live during their marriage with an understanding of their financial obligations and expectancies. Particularly, if one spouse has substantial assets going into a marriage that will be set aside to that spouse if the marriage concludes, the other spouse may elect to continue gainful employment, set aside finances for their future benefit or take other steps with a consideration of the reality of the financial situation he or she has agreed to.
10 Reasons Engaged Couples Are Getting Prenups
While every couple may be eligible for a prenuptial agreement, some may agree that it is simply not needed. How do you know if a prenuptial agreement is right for you? Obviously, every case depends on your specific life and financial circumstances, but the following are eight common reasons that couples come to our office to obtain a prenuptial agreement:
1. You or your future spouse have been married before:
Often, when one or both parties have had a failed marriage and/or have had to go through an unhappy dissolution of a marriage, they go into the next relationship with their eyes open as to what can happen. In many cases, a previous marriage also means that one or both parties have some assets that they may want to protect, or at least avoid a messy division process. In some circumstances, having been married before means that one spouse may have children, child support, spousal support, debt that needs to be paid down or other court ordered obligations and the new spouse does not want to be responsible to take those obligations on. When one spouse has significant obligations, in some occasions, the new spouse does not want to have their finances tangled with those obligations and therefore, he or she is the one requesting a prenuptial agreement to ensure separately maintained finances.
2. You or your future spouse already have children:
Some couples desire a prenuptial agreement to establish agreements about what one spouse’s children or both parties’ children will be entitled to. Often it is difficult when one spouse has had a significantly different financial arrangement or circumstances than the other spouse. For example, how should a newly married couple handle finances if they have children of about the same age and one spouse’s children has significant college funds saved to help with that expense while the other spouse’s children have little or nothing saved. What about payment for first cars? Weddings? If one spouse’s adult children need drug or alcohol rehab programs? There are many financial issues that can come up in a marriage and it is very likely that the spouses will have differing viewpoints on how these issues should be addressed. Knowing this, the spouses are better off to discuss this, enter into a plan or agreement and put that information in writing through a prenuptial agreement so expectations are clear.
3. If One Spouse Has Significant More Wealth/Money than the other spouse:
One spouse may want to protect the wealth that he or she has built prior to the marriage. Often this means planning or indicating that if the marriage does not work out that the spouse will leave the marriage with the money or resources that the spouse came to the marriage with. Beyond that, though, while it is generally presumed in many states that a spouse will leave the marriage with what he or she came to the marriage with, in some situations if a spouse is going to leave a job and serve as a house spouse or stay at home parent, often that spouse will want to calculate to an entitlement of assets to allow him or her to rebuild their life if a divorce (and subsequent return to the work force) is needed down the road. Again, planning for unhappy outcomes or possibilities will make figuring out unfortunate situations much more simple to navigate.
4. If One Spouse is Coming to the Marriage with A Lot of Debt:
If your future partner has debt or has a business or other venture which could involve significant debt or risk, some spouses do not want to possibly be tied to that. Given this, they will enter into a prenuptial agreement making clear their expectation of separate finances. Often this is important because banks and other businesses who provide financing sometimes make it contingent upon the other spouse signing or even joining as a co-borrower. To avoid the surprise that one party does not plan to join with a request for financing, again, it is helpful to discuss these issues plans in advance, hopefully diverting a future disagreement or dispute during your marriage.
5. When One or Both of the Spouses are Small business Owners or Entrepreneurs or Plan to Start a Business:
In some families, one spouse either owning or planning to own or start a small business can be reason to plan for the eventual success (or failure) of the business. In other situations, when there is a family or closely held business or a business with even a partner, the other people involved in the business will request or even require that a prenuptial agreement be obtained. This is because in the absence of such a protective agreement stating the parties intentions in the event of a divorce, the divorce court could award the other spouse a part of the ownership or business shares of stock in a company. Many business partners object to co-owning their business with a spouse of a business partner that they did not agree to work with.
6. When One or Both Spouses Want to Keep Their Private Finances Private:
In both, Kansas and Missouri, when you get a divorce, your entire financial information and history is provided to the court and becomes a matter of public record. Many prenuptial agreements will now contain a confidentiality clause limiting what information will go into the court file or what will be shared with the court or even third parties. In some situations, if a spouse has a public reputation such as a sports job, or other publicly recognized employment, the spouses will agree that neither party will harm or damage the other party’s reputation, including through television, interviews, social media or any other publication, including writing a book or memoir about their former spouse (or writing information to imply that the spouse was harmed such as the recent very public case we saw with Johnny Depp and Amber Hurd).
7. When the Couple is Engaged for a Very Short Time:
For some couples it is love at first sight. They know from the moment that they meet that they are meant to be together! However, spoken from the knowledge of a divorce attorney, while love at first sight is possible, in some circumstances, the parties do not actually know one another as well as they think they did when things are so blissful in the “getting to know you stage.” For other couples, they do not want to talk about what would happen if their marriage were to end while they are in the exciting and romantic stages of planning their wedding so they seek an antenuptial or post-nuptial agreement after their marriage is completed. A postnuptial agreement can be entered into at any time after the marriage and for many couples, they regularly and routinely revisit and renegotiate the terms of their prenuptial or post-nuptial agreement.
8. If One Spouse Doesn’t Work or Doesn’t Plan to Continue Working After the Wedding:
If one party will be staying at home to raise a child, or even if the other spouse, such as a step-mother will be stopping employment to raise the husband’s children, the parties will often need to discuss and plan for financial circumstances to allow for a plan if the marriage ends. Often this means that one spouse has given up opportunities for career growth, maintaining employable job skills and other benefits and is not left with something substantial to fall back on if the marriage fails. This is particularly concerning when the marriage is of a short duration, such as a few years. If a spouse is out of the work force for a few years, he or she may find it very difficult to return to a previous career or career field, but the spouse may not be entitled to significant maintenance to be supported and meet his or her needs. Again, making significant life changes, including a career change to go from working to staying at home is something that should be discussed and planned for. for
9. To Protect Inherited Assets or Assts One Spouse Anticipates Receiving:
When the Court divides a married couples property at the time of a divorce, the court considers the assets that a party came into the marriage with or inherited during the marriage. However, in Kansas, the court has the opportunity, if the court feels it is best after considering all factors, to award an inherited asset to the other party. Unfortunately, we sometimes see this in the case of a family home. If, for example, a husband inherits a home and it is meaningful and sentimental to him, but the wife has been the primary caretaker of the children who are adjusted to the family home and attend school based on living in the family home, the husband faces the possibility that the home will be awarded to the wife. To insulate against this possibility, the best way to protect this scenario is to enter into a prenuptial agreement. Some family’s trust documents or other wills or inheritance documents require that the party receiving funds enter into a prenuptial agreement with any future spouses.
10. Protecting Situations Where Long-Term Care Issues May Arise:
For some couples who marry later in life, the parties will elect to make it clear, in writing, before they ever marry, that their expectation is that each party is responsible for his or her own end-of-life care costs. In other situations, the couple will agree before a marriage to purchase policies of long term care insurance so that they have this issue covered. Some spouses are concerned that if their spouse requires long term care, their assets will be depleted in caring for the spouse, resulting in their inability to leave assets as they had hoped or planned for their children or grandchildren. When a spouse qualifies for public funds, such as Medicaid funds, a prenuptial agreement will not be honored. On the other hand, to protect a spouse’s funds from being depleted, in some situations, the marriage has to be terminated to protect assets and a prenuptial agreement allows for an easy or simplified process in meeting these needs.
How Can We Help?
Whatever your motivation is in exploring the possibility that a prenuptial agreement is needed, in our experience, pre-planning for possible outcomes will always allow for a better, smoother and anticipated outcome. If you believe that a prenuptial agreement may be the right choice for you- or you want to have a consultation to explore whether it is the right option for you, call Pingel Family Law today at (816) 208-8130 to schedule your consultation!