Almost everyone knows what a prenuptial agreement is, but relatively few people actually have one or have looked into getting one. Those who do have prenuptial agreements tend not to talk about them publicly. Accordingly, many of the ideas floating around about prenups are inaccurate or outright false.
When you picture a couple that is getting a prenup, what do you imagine? A wealthy prospective spouse trying to keep assets out of the hands of a fiancé(e) who is not well-to-do? A couple that isn’t fully committed to the idea of marriage, and perhaps even expects to divorce? These are common stereotypes. And while prenuptial agreements are useful when an engaged couple has a disparity in wealth or in the event of divorce, they have much wider applications. Here are some common prenup myths—and the truth that goes with them.
There’s no doubt about it—having a prenuptial agreement does make a divorce easier if you ultimately need to get one. Emotions run high in divorce, and that makes it hard to calmly negotiate the “business” of the divorce: what property is subject to division, how it will be divided, and whether one spouse will be entitled to alimony.
But planning for the possibility of divorce doesn’t mean that you are giving up on your marriage before it even starts. The reality is that learning to talk about hot-button issues like money while negotiating a prenuptial agreement can improve communication, and reduce the misunderstanding and conflict that can lead to divorce.
People with significant assets certainly can benefit from prenuptial agreements, but wealthy people are not the only people who need a prenup. A prenup is a contract between two people who are planning to marry, and it can help resolve all kinds of issues, primarily financial issues, such as:
You don’t have to be wealthy to have financial disputes, so it makes sense to plan to avoid those conflicts regardless of your net worth. Also, remember: just because a couple isn’t wealthy when they get married doesn’t mean that they won’t accumulate wealth. A prenuptial agreement allows you to plan ahead for potential scenarios such as a spouse starting a successful business, or one spouse sacrificing their own career and earning potential to care for the couple’s children or to support the other spouse’s career.
Simply making a prenup can help a couple “get on the same page” and communicate better about challenging issues. But, like any contract, a prenuptial agreement also clarifies the parties’ rights and responsibilities in the event of a dispute—in other words, when one party tries to enforce the agreement against the other.
There have certainly been situations in which one spouse successfully argued that a prenuptial agreement they signed was unenforceable, say, because they signed it under duress. But a properly negotiated and executed prenuptial agreement is enforceable in Maryland.
To avoid later allegations of unfairness, it is important that each intended spouse have their own independent attorney review and explain the agreement. The agreement should be executed well before the wedding, to avoid allegations that one spouse only signed because the other threatened to call off the impending wedding otherwise.
The agreement should be made only after each party makes full and accurate disclosure of their financial situation, and the agreement must not be unconscionable (grossly unfair) at the time it is made. Last but not least, to be enforceable, the agreement must comply with all legal requirements, such as that it be in writing and be signed by both parties prior to the marriage. The best way to ensure that your prenuptial agreement is enforceable is to have it negotiated, drafted, and reviewed by a Maryland attorney.
The idea of getting a prenup often comes from the intended spouse with more assets, but that doesn’t mean that they have all the power in the agreement, or that it benefits them more. Part of the reason that it is recommended for both intended spouses to be represented by their own attorneys is so that the agreement will be fair to both of them. An experienced attorney’s representation ensures that each party fully understands their rights and responsibilities under Maryland law, and what it means to alter those through a prenuptial agreement.
Just as getting a prenup doesn’t mean that you’re planning for your marriage to fail, it doesn’t mean that having such an agreement is useless unless you get divorced. As mentioned above, negotiating a prenup can help you establish financial ground rules for your marriage that make your relationship more functional, not less. But there are other reasons to get a prenuptial agreement other than divorce.
For example, many couples with children from previous relationships opt to get a prenuptial agreement, even if they plan to stay married “until death do us part.” A prenup can be used to agree on spouses’ inheritance rights. That allows couples to agree that certain of their assets to be inherited by their children, not the surviving spouse, even if state law would otherwise entitle the spouse to a portion of those assets. Accordingly, if you are older and have accumulated wealth that you want your kids to inherit, you should really consider a prenup.
To paraphrase the expression, “If you think education is expensive, try ignorance,” if you think a prenup is expensive, try a bitterly contested divorce. It can’t be said enough: getting a prenuptial agreement doesn’t cause divorce. But if you should end up getting divorced, having an enforceable prenup can save you tens of thousands of dollars in legal fees because you’ve already resolved potential disputes.
To learn more about prenuptial agreements in Maryland or to speak with an attorney, contact Strickler, Platnick & Hatfield to schedule a consultation.