Prenuptial agreements are a touchy subject, but they can provide important protections. So why would you get a prenup? Here are six things a prenup can do:
- Protect separate property. In divorce, a prenup can help ensure that you leave the marriage with the assets you brought to it.
- Clarify debt responsibility. A prenuptial agreement can shield you from your spouse’s debt.
- Establish parameters for financial management. A prenup can set rules for saving, spending and financial decisions during marriage.
- Resolve issues related to children from previous marriages. If you have children from a previous marriage, a prenup can safeguard their interests.
- Address concerns about business ownership. Prenups can protect businesses from the repercussions of divorce.
- Establish guidelines for resolving disputes. You can incorporate dispute resolution solutions into a prenup, which may help avoid divorce.
Reasons to Get a Prenuptial Agreement
People don’t go into marriage expecting to divorce. However, you never know what the future may hold. It is smart to plan for any eventuality to safeguard your financial well-being. Prenuptial agreements aren’t all about divorce, though. A prenup can also aid marriages by opening lines of communication and clarifying future expectations.
Protect Separate Property and Assets That You Had Before Marriage
To be sure, there are certain divorce-related aspects to signing a prenuptial agreement. For example, one of the primary reasons why people enter into prenuptial agreements is to protect their personal and real property that amassed before the marriage. While assets owned prior to the date of marriage are generally considered “separate” property that is not subject to division in a divorce under New Jersey law, there are exceptions. Often, both spouses will benefit by clarifying that the assets they had before marriage will remain theirs in the event of a divorce. Doing so may avoid potential battles, legitimate claims or not, over the assets should the marriage end.
Clarify Debt Responsibility to Avoid Disputes Later On
A premarital agreement can provide clarity regarding the spouses’ respective obligations for individually incurred debts as well. For example, a prenuptial agreement could state that each spouse is solely responsible for paying off their own credit card debts incurred prior to the marriage – or perhaps whatever each of you will charge during the marriage even if the charges are for marital expenses. If your spouse has significantly more debt than you, this can be especially important.
Conversely, an agreement could state that a high-earning spouse will help pay off the other spouse’s outstanding school loans but does the payor spouse get reimbursement for that in the event of a divorce? There are many different options for drafting prenups to clarify who pays for what debts and what the protocol should and should not be in the event of a divorce. Setting clear expectations up front can help avoid contentious disputes later on.
Establish Parameters for Financial Management for Saving, Spending and More
Similarly, many couples choose to use prenuptial agreements to establish parameters for financial management. This can include everything from setting savings goals to determining investments to imposing limits on discretionary spending. A prenuptial agreement can act as a tool for getting couples talking about finances and implementing wise financial planning that can be valuable throughout the marriage.
Resolve Issues Related to Children from Previous Marriages and Relationships
If you or your soon-to-be spouse have children from previous marriages or relationships, a prenuptial agreement can establish terms regarding financial support, gifts, parenting time and related matters. It can also designate future inheritances that you want your children from the previous marriage to have when you die.
Address Concerns About Business Ownership and Control
A privately held business is a form of property; and, while a business is very different from a car or bank account, it is subject to the same basic rules of property distribution under New Jersey’s divorce laws. If you had the business before the marriage, it may be considered separate property. However, those lines can blur if your spouse contributed significant time or money to the business. Without a prenup in place, you could lose your business or be forced to divide it with your ex-spouse.
Additionally, disputes about joint management, spousal employment, reinvestment of profits, and various other business-related issues can lead to conflicts during the marriage – not to mention adding multiple layers of complexity in the event of a divorce.
Establish Guidelines for Resolving Disputes
Disagreements are a part of marriage, and spouses’ who feel comfortable speaking their minds can be a sign of a healthy relationship. But, sometimes, even in strong marriages, spouses can find it difficult to come to terms. In order to prevent disagreements over finances and other issues that lead to feelings of resentment, hostility, and possibly even divorce, spouses can incorporate dispute resolution provisions (such as a requirement to go to therapy or use mediation) into their prenuptial agreements.
“Why Would You Need a Prenup?”
How to Tactfully Address Your Future Spouse’s Concerns
Prenuptial agreements can be sensitive areas. Your future spouse may very well ask, “Why would you need a prenup?” First, it isn’t about why one partner needs the agreement. It’s about how a prenuptial agreement can benefit both of you. If you believe that it may be in your best interests to get a prenup, it’s important to explain tactfully to your future spouse the benefits they can offer. The six reasons we’ve discussed here can help you do that by illustrating instances where it is in both of your interests to address issues in writing. By doing so, you can show that, contrary to popular belief, getting a prenuptial agreement is about much more than simply “planning for divorce.” It is also about planning for a successful future together.
New Jersey Law Governing Prenuptial Agreements
The Uniform Premarital and Pre-Civil Union Agreement Act (NJ Rev. Stat. §37: 2-34) governs prenuptial agreements in New Jersey. It describes what can be included in prenups and the requirements for prenups to be valid, including that they are in writing, they are signed by both parties, and they include statements of assets and debts from both parties. When these requirements are not met or prenups are not otherwise properly prepared, they could be unenforceable in the event of a challenge during divorce or in another dispute. If you’re considering a prenup, for your own protection, get the help of a family law firm with extensive experience preparing prenuptial agreements that stand up to challenges.
Get Experienced Help from a New Jersey Family Lawyer
At MR. Men’s Rights Divorce & Family Law of New Jersey by Schultz & Associates, LLC, we help clients enter into prenuptial agreements tailored to their unique needs. We can help you, too. To speak with an experienced lawyer who drafts prenuptial agreements, call (201) 880-9770 today.