Pre-Nuptial Agreements Aren't Just for Divorce
Admittedly, it is uncomfortable to raise the idea of signing a pre-nuptial agreement with the person with whom you have just agreed to spend the rest of your life. And it’s unlikely to get any more comfortable for you when you actually start discussing the terms of the agreement.
That said, it is a discussion that I recommend anyone planning a marriage have if one of you has accumulated more assets than the other, expect a major inheritance, have children from a previous relationship, intend to start a business or will be obtaining a license for a professional practice.
It doesn’t mean that you believe your marriage will fail or that you are preparing to separate even before you marry. Pre-nuptial agreements also address what happens upon death, a topic that is especially important when one or both of you have children from other relationships and may be obligated to maintain life insurance or other benefits for those children. This will impact the amount of your assets that your spouse inherits and should be addressed before you get married.
Unlike a separation agreement which is required to address certain terms to be valid, a pre-nuptial agreement can address as much or as little as you both desire. I have drafted an agreement that pertained only to one issue (what would happen to a party’s share in a family business in a divorce or upon death) and agreements that addressed all existing assets, future assets and maintenance in detail.
Before I started my mediation practice, I used to represent one party in the drafting or review of the pre-nuptial agreement, and while I endeavored to keep it friendly given that my client was marrying and not divorcing the other party, it still seemed more adversarial than it needed to be since it was mostly my talking to the other attorney without the couple being involved.
On the other hand, mediating the terms of a pre-nuptial agreement will not only keep the couple in control and help to keep the process non-adversarial, but it will also allow the couple to have a give and take discussion about topics that while unpleasant to discuss before the marriage could be devastating to address after the marriage. Additonally, because of the open nature of the discussions that a couple has in mediation, things come up which might not typically be included in a basic pre-nuptial agreement.
For example, I was with a couple who had both been married previously, but only one of them had children. While we were discussing what they wanted regarding property that was accumulated during the marriage, the soon to be husband posed this to his soon to be wife. If he received a major bonus and wanted to give a very generous gift to his children from that bonus, would he be able to do that or did he need to ask permission? Even though they had been living together for years, they each kept separate accounts, and he had a real concern about losing the control and sole discretion over “his” income that he had enjoyed since his divorce. She then explained how it would make her feel if he kept her out of the decision making process when it came to what she considered “their” funds and that she wouldn’t consider making a big gift to one of her family members without telling him first. Ultimately, they came to an agreement that each would be able to dispose of up to a certain amount of their income/assets as gifts to family members with no questions asked, but that anything over that would need consent of the other.
I can imagine that this would have gone quite differently if instead of having the discussion in a mediator’s office before they married, the wife was going through their accounts and was surprised to see that her husband had given a substantial amount of money to his children.
So, don’t be afraid to go through a little bit of discomfort now to avoid suffering later, and have that difficult conversation about a pre-nuptial agreement with your spouse-to- be before you marry.