Do you need a prenuptial agreement?
While prenuptial agreements aren’t for everyone, they are an absolute necessity for some people. I cannot tell you how often I have someone sitting in my office surmising “I wish we had signed a prenup.”
As you may or may not know, prenuptial or antenuptial agreements, colloquially referred to as prenups, are generally contracts entered by parties prior to their marriage (or civil union in some states). The substance of prenuptial agreements can vary, but typically they address the divorce issues of property division, property rights, liabilities, debts, and alimony. A properly drafted prenuptial agreement should address the commingling of separate and joint property. (Note, prenuptial agreements cannot address custody and child support, because the best interests of the children controls at the time of divorce.)
But how do you know if you need a prenup? While I encourage you to discuss this question in confidence with a lawyer trained in this intricate area of family law, I think the following checklist of questions will help guide you in determining if you should have that discussion with an attorney. If you or your future spouse answers “yes” to any of the following, a prenup might be appropriate for you:
– Do either of you consider yourself high net worth individuals?
– Do either of you have significant stock holdings, stock options, profit sharing, bonds, other investments, or cash?
-Do either of you own any real estate (including investment / rental property)?
-Are either of you a business owner?
-Do either of you currently earn more than $100,000.00 per year?
-Is there a disparate difference between your income / assets and those of your future spouse?
-Do you want your estate (or a part of it) to go to your children (and/or children of a former marriage) instead of your spouse?
-Do either of you have professional licenses or degrees?
-Do either of you have significant family wealth or expected future inheritance?
While this checklist is not intended as an all-inclusive list, it is one that should at least start the conversation with yourself (and perhaps your future spouse), about whether a prenup is appropriate. Again, I encourage you to speak with an attorney who specializes in this area of law if it is something that you are considering or are on the fence as to whether or not a prenup is right for you.