What Items Should You Discuss in Your Prenup?
Though only 10% of Americans get a prenup, this legal document can be very useful. Not only does it protect your assets in case of divorce, but it also helps clarify any financial issues before arguments arise. To get the most out of your prenuptial agreement, you need to ask these important questions.
What Property Do You Want to Keep Separate?
One of the first and most essential things to discuss is property separation. In New Jersey divorces, all property is split into marital and separate property. Marital property is any asset acquired during the marriage, and you usually have to divide it in the divorce. Meanwhile, separate property is the property you owned before the marriage and, in general, get to keep in a divorce.
The reason so many family lawyers recommend prenups is because it lets you define additional items as separate property. For example, if you owned a business before your marriage, usually your spouse could seek a share of any appreciation that took place after marriage. However, you could specify in the document that in the event of a divorce, the increase in value from the business remains solely your property.
There are all sorts of assets you should consider when discussing property division. Your family law attorneys may suggest you talk about things such as:
- Real estate
- Savings accounts
- Stock, cryptocurrency, and other investments
- Valuable assets like paintings or collectibles
- Retirement accounts
- Sentimental items and keepsakes
How Will Your Children Be Provided For?
If either spouse has children from a previous marriage, it is important to discuss them in your prenup. Start by considering the essentials such as which partner will pay for the children’s needs. This can be a good opportunity to talk about whether you want marital funds to cover things like school, clothes, or extracurricular activities. You should also discuss whether a parent’s responsibilities to their stepchildren will end in the event of a divorce or not.
You can also use a prenup to protect the interests of a partner’s children. You can discuss whether assets gained during the marriage will be part of the stepchild’s inheritance or if they will revert to the nonbiological parent. It can also be helpful to talk about whether specific assets, such as a family property, should remain separate property that the parent can will to their child eventually.
How Do You Want to Handle Inherited Family Property?
Another thing included in most prenuptial agreements is family property. Typically, New Jersey does not let one spouse have a share of another’s inheritance, regardless of when they receive the inheritance. However, keep in mind that your spouse might be able to access things like dividends from an investment you made with your inheritance. Any time either person is inheriting large sums of money, you need to talk with a prenup lawyer and decide how you want to handle these issues.
You can also use your prenup to discuss items you want to pass on to others. A prenup is not a will, but it can be a helpful way of discussing intentions for family property. If your family has something like a historic estate or even a treasured ring that gets passed on to each firstborn girl, you need to talk about it in your prenup. Every family is different, so it can be useful to consult with some family lawyers and see whether your specific situation will require certain prenup clauses.
What Financial Responsibilities Should Each Spouse Fulfill?
A prenuptial agreement can be an excellent time to discuss your financial responsibilities. Typically, these types of agreements cover such things as which party is responsible for debts. Some couples also find it useful to consider things like which partner should pay for housing, utilities, or taxes. If desired, you can even discuss future scenarios such as who would pay if one person wanted to go back to school.
Why does this matter in the event of a divorce? It can help your divorce attorneys justify any arguments you might have for future asset division. For example, if your prenup says your spouse was supposed to pay for their car payments but you ended up paying all of them, you could reasonably ask for ownership of the car during a divorce.
Will Either Spouse Get Alimony If a Divorce Occurs?
Your prenuptial agreement is also the ideal time to discuss whether either spouse gets alimony. Typically, your divorce lawyers might ask the court for alimony if you have been married for a while and no longer work outside the home. Your prenup lets you define your alimony terms now instead of leaving it up to the court in the event of a divorce.
There are all sorts of ways to handle this issue in a prenuptial agreement. Some spouses might choose to say that neither spouse gets alimony unless the marriage lasts a set amount of time. You can also discuss things like how long alimony payments would last or how much they would be. If you are unsure of how your circumstances might change, it can be helpful to consider requesting a set percentage of a person’s future income.
Is Everything in Your Prenup Legal?
Finally, take the time to have a divorce attorney ensure that your prenup is prepared pursuant to the law. There is a lot of confusion about what counts as a legal prenup, so it’s possible to make a small mistake that can invalidate your whole agreement. Both parties need to be completely honest and transparent. Hiding any assets will cause issues later on. You both need your own, unbiased family law attorney to look over the document and protect your interests. Prenups can also be invalidated if there is coercion. Doing something like presenting your spouse with a prenup right before the wedding and saying, “Sign this or we cancel the ceremony,” could invalidate the document.
Keep in mind that there are many things a prenup cannot determine. It cannot be used to settle anything having to do with child custody or child support. Prenups cannot be a means of threatening your spouse with financial consequences if they displease you. You can’t use them to do things like make one spouse take out the trash every day or always wear heels on date night. Furthermore, the court doesn’t typically enforce any prenup clauses that have to do with sex. Though “infidelity clauses” are commonly included, most courts will not allow one spouse to impose a fine on another for cheating.
By taking the time to consider your finances and your lifestyle, you can design a prenup that gives you peace of mind. At Lawrence Law, our team of New Jersey divorce lawyers helps people navigate all the legal and financial challenges of the end of a marriage. We have offices in Watchung and Red Bank and plenty of experience assisting with prenups, divorces, custody, and mediation. To learn more about our services, call 908-645-1000 or reach out online to schedule your free consultation.