With summer wedding season here, a growing number of couples are adding to their pre-marriage to-do lists a visit to their attorneys to have a prenuptial agreement put in place. A “prenup” is a legally binding document that lays out certain parameters and terms regarding a couple’s assets and finances should their marriage end in divorce. Considered a “life insurance” of sorts for marriage, prenuptial agreements are now viewed as a sensible choice for soon-to-be married couples, especially given the changing demographics of marriage in New Jersey and across the U.S.
In the past, it was common for couples to wed in their early 20s, an age when neither party tended to enter marriage with substantial assets. In today’s word, many couples are in their 30s or 40s or beyond when they finally walk down the aisle for the first time — and growing numbers of older couples are entering into their second marriage or more. In these marriages, one or both spouses may already have a number of significant assets to their name, including a home, business interests, retirement plans, and their own stock portfolio. They may also have children from previous marriage or relationships.
Are you entering into a second marriage and wondering what a prenup can do for you? Consider these seven ways premarital agreements can offer special protections for older brides and grooms.
Your Home: You bought your house long before you met your soon-to-be spouse. After the wedding, you will both reside in the home. In the event of a divorce, is this property a marital or separate asset? To avoid the gray area that family homes can often fall into, putting in place a prenuptial agreement is an easy way to legally outline home ownership as well as what will happen to the home in the event of a divorce.
Your Business: Whether you own a solo business or own a stake in a family or multi-partner business, could your spouse claim a part or percent in divorce, even if he or she didn’t participate in it? To safeguard business ownerships and business shares in divorce, a prenuptial agreement can clearly define these types of investments and income as separate, or can outline the specific percent a spouse would be entitled to claim.
Retirement Accounts: Nearing retirement age? Retirement and pension accounts in New Jersey are typically considered subject to the state’s equitable distribution laws. A valid prenuptial agreement can exempt retirement accounts from consideration as marital property, or fix a certain percentage/split if the couple does divorce. For more on retirement, see Help Your Golden Years Stay Golden: Protecting Your Retirement in Divorce.
Alimony: In the event of a divorce, how much will you pay or receive in spousal support? Will it be enough (or too much to pay), especially if you are nearing retirement? Making decisions about alimony now in a prenuptial agreement can give you both greater peace of mind.
Assets Earmarked for Children: If you have children from a previous relationship and know that you would like certain assets you currently own — money, stocks, or furniture or other real property — to be inherited by these children as part of your estate, a prenuptial agreement can include language listing which specific property is to be kept separate for their interest. For more, see our article on Estate Planning for Children of Divorce.
Bank Accounts & Credit Cards: Have a hefty savings account, or likewise, have a wonderful spouse-to-be who made the mistake of over-spending on his or her credit cards a few years back? A prenuptial agreement can specify these types of separate items — individual bank accounts and personal debt — remain separate in the event of a divorce, rather than being open to division.
Personal Property: Did you inherit your grandmother’s fine jewelry? Own a collection of rare antiques? Buy an expensive TV that you bought prior to marriage? To avoid confusion in the event of a divorce, outlining in a prenup ownership of personal property or an inheritance can save much haggling and heartache down the road.
Engaged and wondering whether a prenuptial agreement is right for you? Please contact us for an initial consultation to discuss your asset situation and available options. We are here to offer confidential legal guidance to help bring you peace of mind.