February: The Month of Love, Planning, and Prenups
February – the month of love – a time when many couples get engaged and start planning their weddings. Whether you’re already married or in the wedding planning mode, one discussion that should happen, but often times is overlooked, is the benefit of postnuptial and prenuptial agreements.
With this in mind, every year I hop onto Urban Dictionary* to see if the contributors have changed their outlook on marriage. Unfortunately, it does not appear 2018 is that year. A smattering of definitions of marriage can be found on the site including, “the root cause of divorce,” “the most successful wealth transfer scheme ever invented,” and “a contract that if presented to you by an agent/lawyer would be sufficient grounds for a legal malpractice suit.”
The question I always ultimately ask myself is whether this is funny ha-ha or funny sad? And I always come to the same conclusion: maybe a little bit of both. Whatever view you take, prenuptial agreements are important to consider before walking down the aisle and postnuptial agreements if you’re already married.
So what exactly are prenuptial and postnuptial agreements? They are agreements that allow a couple to alter their spousal rights under state law in the event of death or divorce. A prenup is used prior to marriage and a postnuptial agreement is used if you’re already married.
What are the common reasons for entering into one of these agreements?
- It’s your second marriage and you want to protect the interests of your children;
- You have specific personal and business assets which need to be protected;
- There is a large disparity in the amount of debt being brought into the marriage;
- One party is responsible for support obligations;
- You’ve been through a contentious divorce and want to set expectations in advance; or
- You plan to quit your job in order to raise a family
In Minnesota, in order for the agreement to be valid, it must be in writing with full disclosure of the parties’ earnings and assets. This way both parties can make informed decisions about the spousal rights they may give up. Interestingly, state law only requires that each party be given the opportunity to consult with his or her own legal counsel, but it is always advisable for each party to have his or her own attorney. Otherwise, you run the risk of an unenforceable contract, especially if the agreement seems unfair to one party given the circumstances. A postnuptial agreement does, however, require each party to be represented by separate legal counsel at the time of its signing.
These agreements do not mean the couple is expecting a future divorce. What it can signify is that both parties want to foster upfront and honest communication and plan in advance to prevent surprises in the future. The key to a successful prenup is discussing the topic sooner rather than later. The agreement should be entered into well in advance of the wedding date.
*Warning: some definitions found under Urban Dictionary are colorful and far from politically correct. The author and the firm do not intend to endorse any of the definitions by referencing them.