5 Myths about Premarital Agreements
Between news coverage, soap operas and family drama, we all have some preconceived notions about premarital agreements (also know as prenuptial agreements). Here are a few of the most common myths, debunked:
Myth 1: Prenuptial agreements are only for wealthy people, my fiancé and I are not rich and so we don’t need an agreement.
You may not be rich, but you definitely want to have a successful marriage. Having those honest discussions regarding how the two of you will approach finances will ensure that there won’t be any surprises once you are married. You never want to actually need to enforce the premarital agreement, right? Talking about financial issues in advance will help insure that you handle your finances with minimal conflict during your marriage as well as in case of divorce.
Myth 2: Prenuptial agreements are designed to simply protect the wealthier spouse and strip the other spouse of all of his or her rights.
Fact: Prenuptial and premarital agreements should be designed to protect both spouses. Premarital agreements which are unfair and completely one-sided are probably not enforceable in court. By definition, the agreement must be fair. The basic requirements for premarital agreements to be enforceable are: signing the agreement must be voluntary, it can’t be unfair when it’s signed; each party needs to make a full disclosure of your assets and debts.
Premarital agreements can be designed so that everyone’s needs are met.
Example: With a premarital agreement, you will know in advance how your assets and debts would be handled in the event you do not stay married. You’re negotiating the property settlement while you’re both in love with each other. You would not be at the mercy of your spouse’s generosity or lack of generosity at the time of a divorce.
Myth 3: Premarital Agreements Aren’t Romantic.
Fact: Jessica Simpson and Paul McCartney didn’t think they were romantic, either. And, there’s nothing romantic about fighting about money once you’re married because you never discussed how you’d handle your finances, either.
Myth 4: Premarital Agreements must deal with every issue that might come up in a divorce.
Fact: You can include as many issues or as few issues as you wish. Because premarital agreements are private contracts, you can make them as detailed as you want.
Example: If the only thing you want for your premarital agreement to accomplish is to protect your pre-marital property, you can limit your premarital agreement to that issue alone.
If the only thing you want for your premarital agreement to accomplish is to outline what would happen in the event of your death, in addition to a Will or a Trust, you can limit your premarital agreement to that issue alone.
If you want your premarital agreement to cover almost every issue that might come up in a divorce except one or two issues (like spousal support, or contributions to a pension during the marriage, for example), then you can have the agreement cover everything except the issues you want to exclude.
If you want your premarital agreement to cover every issue, you can do that, too.
Myth 5: If we don’t get married, my live-in mate won’t have any claims to my income or property.
Fact: You could risk your income or assets by living together without marrying.
Palimony is a spousal support substitute for alimony or spousal support for people who are not married. Palimony claims are difficult to prove, but that doesn’t stop some people from trying.
If you are going to live together without getting married, you’ll want a cohabitation agreement. It’s better to decide who contributes to and owns property before you buy things rather than afterwards.
Conclusion: The truth is that a carefully crafted premarital or prenuptial agreement can cement your relationship, prompt you to have the hard discussions that engaged couples need to have, and insure that your finances are handled the way you each intend in the event you were to divorce or pass away prematurely.
Diana Mercer is the co-author of Making Divorce Work: 8 Essential Keys to Resolving Conflict and Rebuilding Your Life (Perigee 2010). Join the conversation and community on our video blog and check out Diana’s divorce blog on the Huffington Post