Jennifer Abrams Discusses the Pros and Cons of Prenuptial Agreements
A prenuptial agreement is a contract between two soon-to-be spouses prior to marriage. The agreement specifies numerous conditions, which are typically financial in nature, and can cover issues during the marriage and/or in the event of divorce. A properly drafted and executed prenuptial agreement is a legally binding contract. Jennifer Abrams, a 20-year board certified divorce attorney in Las Vegas, NV, knows that there are several reasons why couples enter into prenuptial agreements which includes each party knowing where they stand financially, having financial independence over their separate property assets, avoiding responsibility for the debt and obligations of the other party (except for the necessities of life), and avoiding protracted litigation in the event of a divorce. The most common reason for a prenuptial is agreement is for one party to protect disparately greater premarital assets and earnings than the other.
Prenuptial agreements, also called premarital agreements or “prenups,” are a growing trend in couples planning to marry. There are two main reasons for this: First, many people are entering into marriage later in life, and thus have had the opportunity for financial rewarding careers and asset accumulation. Second, many couples are past their first marriage and want to minimize their divorce related stress and financial exposure if things do not work out.
As far as legal validity, courts generally presume such agreements to be valid but will scrutinize them when there are allegations of unfairness. When procedural and substantive unconscionability are found by a court, the prenuptial agreement will likely be set aside. Procedural unconscionability is unfairness in the process of executing the agreement. The most common example would be presenting the agreement for the first time, just days before the wedding so as not to allow sufficient time for review, consultation with an attorney, or negotiation of its terms. Substantive unconscionability is unfairness in the terms of the agreement. The most common example would be an unfair allocation of income and assets in favor of the party who had the agreement drafted in his or her favor. Inadequately drafted and executed prenuptial agreements are ruled invalid by family court judges on a regular basis. So, in order to fully protect the rights of both parties, it is critical that the agreement is created and executed with the guidance of an experienced family law attorney. Most importantly, do-it-yourself prenuptial agreements should never be used.
Why Sign a Prenuptial Agreement?
There are many reasons for entering into a prenuptial agreement. In most cases, it is because one or both parties have significant assets to protect in the event of a divorce. The agreement puts into place specific provisions to ensure that their financial interests will be protected.
Jennifer Abrams understands that prenuptials agreements address a variety of issues for the soon-to-be spouses. In addition to asset division, the agreements can also cover a wide variety of other issues including, but not limited to:
● Whether or not premarital assets may be transmuted into joint property and if so, how;
● Who has control over what assets during marriage;
● What happens to a business owned by one or both spouses upon divorce;
● Who will pay for what expenses during marriage and upon divorce;
● Whether one spouse will be required to pay alimony and, if so, how much for how long;
● What happens with the marital home upon divorce, which spouse is required to move out, and when.
Pros and Cons of Prenuptial Agreements
As with any legal agreement, there are two sides in deciding whether it is the proper action to take. Anyone contemplating a prenuptial agreement should be aware of the benefits as well as the pitfalls. Let’s look at some advantages and disadvantages of prenup:
Prenuptial Agreements allow each spouse to know where they stand financially. It also gives each spouse the independence to manage their own separate property assets without the interference of the other. Prenuptial agreements can also protect one spouse from being held responsible for the other spouse’s current or future debts. If a couple divorces and one spouse has brought debts into the marriage and/or incurred significantly more debt than the other during the marriage, a prenuptial agreement can specify that those debts are not shared.
Jennifer Abrams understands that spouses can agree on a number of financial issues in the event of divorce. Many people enter into prenuptial agreements because they do not want to risk losing their assets. A premarital agreement can also avoid long and expensive divorce proceedings.
Prenups offer couples an opportunity to negotiate certain future circumstances. When a couple enters into a prenuptial agreement, it is done because both parties have discussed their future, and are agreeing on what will happen if things do not work out as planned. This gives both future spouses a sense of security in knowing, to at least some degree, what an uncertain future will hold.
Not all prenuptial agreements are equal in the eyes of the court. Some people believe that the best way to protect their assets is to do so in the cheapest way possible. A good divorce attorney can have a poorly drafted and/or executed prenuptial agreement ruled invalid in court. Invalid prenups are worthless — the protection believed to have been in place is not there. Once a prenup is ruled invalid, the alimony and property division laws in your state will be applicable to your divorce, as if you never had a prenup in the first place. The best way to ensure that a court rules that your prenuptial agreement is valid is to have it done right. You should seek the support of a knowledgeable attorney who has the depth of experience commensurate with what you have at stake. Additionally, if the agreement requires modifications, you will need to consult with your attorney again for the revisions.
The prenuptial agreement process can be intimidating because you and your future spouse are determining what happens in a divorce before your wedding even happens. The process usually involves negotiations which can make one or both parties uncomfortable. An experienced family law attorney can guide you through the process and help alleviate those stressors.
While there are many advantages to having a prenuptial agreement, it is important to remember that it cannot protect you from every potential future financial or marital problem. When done correctly, premarital agreements are effective and solve more problems than would exist without them.