Prenuptial Agreements – Why have them?
By Natalia Z. Scott, Esq.
Wedding season is around the corner! Are you educated on how to potentially protect your assets before walking down the aisle? Prenuptial Agreements, or Prenups, are a tool many couples utilize when planning for a marriage. They are a way to protect various assets each individual may have prior to the marriage, as well as a way for a couple to financially plan for their future. Prenups are executed prior to the date of marriage and only after each party has had an ample amount of time to understand and be educated about the agreement and its terms. Each party is not required to have their own attorney however it is highly recommended so as to avoid any potential miscommunication or misinterpretation by either party, which could potentially lead to legal issues down the road. Prenups are commonly used prior to a second or third marriage, as generally speaking, at that time each party may have independently established their own wealth, business or even inheritance from other family members. On the other hand, some other couples may want to have a Prenup signed even if it is only the first marriage for each person, as a way to lay everything out on the table in terms of how their finances will be structured moving forward. Additionally, Prenups are very common for couples who are about to blend a family by way of marriage (i.e. children from other marriages).
Prenuptial Agreements are contractual agreements. What this means is that each individual can do whatever they please as long as they understand exactly what they are doing when signing the document. Because prenups are only contracts however, their power is limited in terms of estate planning. A prenup will not be substituted or act as a Will and Testament for a person. It is always wise to have a separate estate plan that specifically deals with intestate laws and handles the issue of inheritance.
As useful of a tool as a Prenuptial Agreement may be, they are not the right choice for each couple. Each family needs to evaluate their own needs and desires and determine whether this is an appropriate tool for them. With Prenups, it is definitely not ‘one size fits all.’