A prenuptial agreement (or prenup) is often more important in a second marriage than in a first. Because of obligations to children, existing assets, and prior legal commitments, a written agreement assures that everyone’s needs are clear and their financial interests protected.
If your future spouse feels uncomfortable about the idea, reassure him that the agreement is intended to benefit and protect you both. The fact that you are revealing all of your assets prior to marriage should be taken as a sign of trust.
A properly drafted prenuptial agreement generally will cover the same topics that you have been discussing, except that it will formalize your discussions into a written agreement. That agreement should specify:
- How any premarital debts will be paid
- How jointly owned assets will be split in the event of a divorce or death
- How separate assets will be treated, regardless of the laws of the state in which you are living at the time you are married, divorced or die
- How your respective incomes are split during the marriage and upon divorce
- Who is responsible for childcare and education expenses during marriage and upon divorce
Prenups can protect your children’s assets, providing for their inheritance in the event that you die or get divorced. Similarly, having a written agreement is critical if either you or your new husband owns a business. Prenups can also include language to protect your current interest and all future benefits that flow from a patent, trademark or creative idea, whether it be a book manuscript, a computer software program, or a pharmaceutical patent.
Both you and your soon-to-be spouse should consult a family law or matrimonial lawyer to negotiate the terms of your prenuptial agreement and draft the final document. If you don’t know of a suitable attorney, ask a trusted professional adviser for a referral. You can also contact the American Academy of Matrimonial Lawyers at www.aaml.org.
Do prenups hold up? Courts tend to honor prenuptial agreements as long as both parties to the contract are open and honest about their assets and liabilities and both have received advice from their own attorneys. Courts generally will not uphold prenups that include false financial information or omit pertinent information about either partner’s assets and liabilities, or agreements that were signed under duress. Given this last consideration, it’s generally wise to sign the agreement at least one month before the wedding, so there is little argument of coercion.
If you did not sign a prenuptial agreement before marriage, you may want to use a postnuptial agreement to protect assets for yourself and your children, especially if you receive a sudden windfall or are expecting a large inheritance. Like a prenup, a postnuptial agreement will specify how assets and liabilities are to be divided during marriage, after divorce or after one of you dies. Many couples use a postnuptial agreement to discuss one particular asset, such as an inheritance, business interest, or new home. Just as with the prenup, both of you should have separate legal counsel and provide full disclosure of all present and future assets to create a legally binding agreement.