Prenuptial Agreements: Saying ‘I do’ to the many advantages
You hear your friends joke about it. You may take a ribbing at your bachelor/bachelorette party. Your parents may even ask about it in secret. It seems to be on everyone’s mind. The unspoken words that are on most engaged couples minds: “Prenuptial Agreement”. *GASP*
Often called a “pre-nup”, most people have a preconceived notion of what a prenuptial agreement is. It has the reputation of being a marriage killer. Many questions arise such as “Don’t they trust each other”? Or statements like, “Well that marriage won’t last—they got a pre-nup”. This is an entirely outdated way of thinking. There are many purposes of a prenuptial contract that this article will discuss.
We have all heard the statistic that 50% of marriages end in divorce. Are these statistics true? Where are these stats coming from? Is marriage not taken serious in this day and age? The bottom line is….it depends on many factors--sources of information, the regional area you reside in, economic situations, and many other circumstances. You can find an enormous amount of different statistics on any of these questions, but a better question would be “How many of these couples have a prenuptial agreement in place”? Or “How many of these couples planned for asset security with a prenuptial agreement”?
Purposes and Protections
There are many advantages for entering into a prenuptial contract before a marriage ceremony. The first reason is for the simple basis that couples do not want the law to dictate who gets what if the marriage dissolves. People want to feel in control of their personal assets as well as the splitting of their finances. A properly executed prenuptial agreement can safeguard assets, provide security to loved ones, keep a business in the family, or simplify divorce proceedings. Nowadays it is considered smart planning to have a sound pre-marriage agreement in place. This document should be as important as your Will, Power of Attorney, or any other legal document.
Second, a prenuptial agreement usually makes sense if a person remarries. Legal and monetary concerns are often very different than in one’s first marriage. You may have children from a previous marriage, support obligations, and own a home or other significant assets. In the event that something happens to you a signed pre-marriage agreement can make sure all assets are divided according to your requests.
Third, it can avoid Michigan’s Inheritance laws. Michigan law provides a spouse certain rights that can override the terms of a will. For example, the surviving spouse has an absolute right to elect against a will that does not provide for him or her and receive instead approximately one-fourth of the deceased spouse’s estate. These laws can get tricky, but an experienced Family Law attorney can help guide you through.
Fourth, if the person you are about to marry has substantial debt; it can protect you from the new spouse’s previous debt if the marriage falls apart. Many times a court does not determine which party owes what obligations when divorce proceedings occur. A proper prenuptial agreement can resolve these issues before they begin.
Finally, the most important reason for a prenuptial agreement may be to avoid alienating your children with a messy divorce. Many times parents, intentionally or not, end up using their children as leverage against each other. A sound agreement can help eliminate the factors involved with legal custody issues concerning children. Other grounds for a pre-nup include protecting earning potential or current earnings, ownership of a business, and saving legal costs.
Plachta, Murphy & Associates always recommends counseling as an alternative to divorce. We do recognize, however, that some marriages ultimately dissolve and having a prenuptial agreement can help alleviate the stress that comes with this particular life transition.
Pre-nups are for Millionaires!
Wrong! Prenuptial agreements are for EVERYDAY people. They may be important to integrate into your estate plan. Family treasures or heirlooms that are near and dear to someone’s heart should stay in the correct family. Increasingly, middle class couples looking to start their life planning for their future have a reliable agreement in place as one of their important legal documents.
The question on most people’s mind is “How do I approach my partner without coming off as someone who doesn’t think our marriage will last”? These are very cautious waters to navigate. Chances are your partner is thinking the very same thing. It is smart planning to have safeguards in place. Start talking about putting a prenuptial agreement in place as soon as wedding plans start to form. Being open and honest up front makes this touchy subject entirely manageable to not only approach, but get the ball rolling as well. Moreover, Plachta, Murphy & Associates can provide you with a checklist you may want to use as a discussion starter.
According to Family Law attorney Miles J. Murphy,
“Every effort should be made beforehand to prepare for a long lasting marriage, and that includes establishing mutually satisfactory rights regarding assets and debts to avoid future problems”.
Miles J. Murphy III, with the law firm of Plachta, Murphy & Associates, P.C. located in Grand Rapids, Michigan has more than 20 years of Family Law experience. He represents individuals and families in court throughout West Michigan. He is also a former member of the Kent County Family and Children’s Coordinating Council. Please feel free to visit us at www.pmalawpc.com, contact Miles directly at firstname.lastname@example.org, or call 616-458-3994.