Yes, You Need a Pre-Nup

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May 3, 2019
Wendy Kaufman

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With wedding season upon us, thoughts turn to champagne toasts, paths of rose petals and finding that perfect dress. What potential brides and grooms don’t want to hear is the startling statistic that half of all marriages end in divorce. Shrouded in premarital bliss, couples are certain they won’t be included in the category of couples whose marriage doesn’t survive. But life is long, unexpected things happen and you need to protect both yourself and your intended.

Sorry to say, but every couple, rich or poor, needs a prenuptial agreement.

Having a prenuptial agreement doesn’t imply distrust. Rather, it defines clear expectations and requires honest, candid communication before you say, “I do.” You have a unique opportunity to build a foundation for your successful marriage. 

For young couples starting out, you can protect yourself from your new spouse’s student loan or credit card debt – because guess what… in the state of Indiana after you get married that debt is one half yours! Older people entering into a second (or third) marriage can make sure their children from a previous marriage are provided for. And because inheritance is included in an Indiana marital estate, a prenuptial agreement will ensure that the money you inherit will not be divided with your spouse in the event of a divorce.

Prenuptial agreements, also known as premarital agreements, address the division of both assets and debts in the event of divorce or death. To be enforceable, each party must disclose and record all of their assets and debt at the time the agreement is signed. Separate property and marital property are individually defined.  

There is tremendous flexibility in drafting the agreement, and virtually any topic (aside from custody of the children) can be addressed. The list is virtually endless, but included among the topics you can address are potential money coming from an inheritance, division of retirement accounts, spousal support/alimony (even if your state does not provide for it), how you will file your income taxes going forward, gift and estate taxes, and even custody of pets. You can even include a “gotcha” clause in the event one person cheats on the other.

To ensure enforceability, each party should be represented by an attorney. After execution of the agreement, you must segregate separate property and only co-mingle property you are prepared to divide in the event of divorce or death. Specificity is important in premarital agreements. If one person agrees to waive their share of a retirement plan, they must also sign a corresponding waiver with their employer or financial institution. 

If you are signing a prefabricated agreement downloaded from the internet on the way to the courthouse be forewarned – it might not be enforceable. A judge won’t honor a premarital agreement signed under duress. And if the agreement is patently unfair, a court might set it aside.

You work hard to build your net worth and it should be protected. Take a moment away from dreams of the perfect wedding day and focus your thoughts on your life after you are married.