The Advantages of a Pre-Nuptial Agreement
Prenuptial agreements (also known as ante-nuptial agreements, or premarital agreements) are contracts between marrying couples that outline what will become of their assets/debts if the marriage dissolves, along with other potential issues such as alimony, attorney’s fees, etc. Most prenuptial agreements are favored by wealthy parties who do not want their considerable assets to be claimed by their spouse in a divorce or who wish to protect them from a court order forcing them to relinquish a large percentage to their partner.
Florida uses the concept of equitable distribution in determining how your marital property will be divided, which may not be on a 50-50 basis. For example, if you have a retirement plan, a court may order that a portion of it go to your spouse.
A properly executed prenuptial agreement should be signed at a reasonable time or at least one month before the marriage and after full disclosure of income, assets and debts is made. Both partners should seriously consider having their own attorneys review the document and approve it to avoid any issue of impropriety, duress, undue influence or coercion.
There are other reasons for considering a prenuptial agreement whether there is a huge disparity in income or not:
1. One Partner is Bringing in a Large Amount of Debt. You probably don’t want to be responsible for the debt your partner is bringing into the marriage if it remains after a divorce. An agreement can protect you from having to pay any part of this non-marital debt.
2. You Own Part of a Business. Upon dissolution, a court could order that your spouse get a share of your business. Your business partners certainly do not want this so draft an agreement whereby your spouse agrees not to claim any part of it.
3. Disparity in Income and spousal maintenance. You may be able to limit the amount of spousal maintenance (or alimony) you may have to pay to your spouse when you divorce.
4. Keeping Your Estate Plan in Place. You may already have an estate plan when you marry and you do not want it upset such as by losing a valuable family heirloom or other item of property you want to go to someone else. A prenuptial agreement can preserve your already established estate plan.
5. Disparity in Income. If your financial status is considerably weaker than your spouse’s, an agreement can protect you by offering you some financial security if you divorce.
6. Raising children. If you decide to leave your job to care for the children, you will want your spouse to share in the financial support of the children if you divorce. A prenuptial agreement can summarize your contribution in this regard and that your wealth has suffered as a result so that your spouse will have to share equally in the financial expenses of raising a child. Florida law does not affect your right to child support if this is an issue.
7. Limit litigation. Prenuptial agreements can also significantly limit the litigation time and expense if the parties are to seek a divorce. By having numerous issues outlined and agreed upon in your prenuptial agreement will leave less for the parties to resolve or the court to rule upon in the event of a divorce.
Prenuptial agreements are not just for wealthy couples or entertainment stars. If you have a reason for a prenuptial agreement, discuss it with your potential spouse and with your respective attorneys. Also, be sure to fully disclose all of your assets and income sources to avoid a possible court challenge down the road.