Pre-nuptial agreements, also called premarital agreements, were once thought of as something for the very rich. This has changed and now many couples across the income spectrum enter into prenuptial agreements, or at least explore whether a prenuptial agreement is right for them.
Why have a prenuptial agreement? Even if you and your fiancé do not have a prenuptial agreement, you will, upon marriage, have an agreement – your state’s marital contract. Its terms have been set by the laws passed by legislature and the decisions made by the judges over the years. The marital contract in your state is what the legislature has decided is best overall for the vast number of marriages across your state. This is supplemented by what your state’s judges decided was best in the particular cases that came before the judges over the years.
It may be that your state’s marital contract is what is best for you and your fiancé and it might not be. You and your fiancé can look at your particular circumstances and your state’s applicable law and decide whether the provisions of state law are appropriate in all respects for your marriage. If you decide those provisions are not best for your marriage, you can make your own particular prenuptial agreement. You will be talking about property, debts, death, and perhaps how to settle things in the unhappy event of a divorce. Arriving at a premarital agreement is not, sadly, a romantic process. But it can be an open discussion that begins your marital communications on a sound basis.
What is the marital contract and what does a prenuptial agreement cover? Briefly what we refer to as the marital contract is the law regarding the financial rights and obligations of spouses at death – intestate succession and election against the will, and at divorce – claims against marital property and for allocation of marital debt, and claims for support. Therefore, the most important purpose of a prenuptial agreement is to specify what happens to property upon the death of the spouses and what happens in the event of a divorce. See previous posts regarding rights of a surviving spouse and various provisions of divorce law in Maryland, Virginia and the District of Columbia.
In your prenuptial agreement you and your spouse can identify all your premarital property, select your own rules for what property will be marital and what will be separate, and the disposition of property at death and at divorce. You can also agree on rules for determining what debts are marital and shared and what debts are separate and therefore the obligation of the spouse who incurred the debt. And you can also waive alimony or specify what alimony will be. And your prenuptial agreement can have other provisions particular to your marriage.
When is a prenuptial agreement appropriate? Only you and your fiancé can decide whether a prenuptial agreement is appropriate for you. But there are various circumstances that indicate the likely need for a prenuptial agreement. A few examples are one or both of you: 1) have children from a prior marriage or relationship; 2) own and operate a business; 3) own real property or have substantial premarital retirement accounts; 4) are leaving employment or relocating on account of the marriage; and 5) have obligations under a prior marital settlement agreement or divorce decree.