You are getting married. You have the caterer. You have the guest list. What about the Prenuptial Agreement?
Although hardly romantic, a Prenuptial Agreement (sometimes called a Premarital Agreement) is a consideration for many engaged couples. When people describe marriage as “tying the knot”, they may be speaking more than figuratively. When you marry, you enter into a new legal relationship. A prenuptial agreement can help define this new legal relationship.
Is a Prenuptial Agreement right for you?
Generally, a Prenuptial Agreement defines the legal rights between spouses upon divorce or death. These agreements tend to make the most sense for parties who have established assets and income and who have dependents, such as children, from a prior relationship that they want to provide for upon death. For example, in Virginia (where we write from), absent an agreement, a married person cannot disinherit a spouse. A married person will generally be entitled to at least one-third of their spouse’s estate. Furthermore, if a person dies without a will, their spouse inherits everything. Most retirements also require a spouse affirmatively to waive any beneficiary status before permitting one to designate a different beneficiary or to waive a survivor benefit. While this may comport itself with one’s wishes, it may also be that the individuals who plan to marry already have substantial assets and want to provide for others as part of an estate plan.
Premarital agreements generally do not make as much sense for a younger couple who are at the start of their careers and may have children. There are likely to be many choices and changes ahead that a premarital agreement cannot anticipate. One person might forestall a career to stay home with children. One person’s career might take the family all over the globe (consider a military or State Department family) giving the other spouse very little opportunity to develop a retirement. One person might start a business or join a startup venture. In the event of divorce, each of these situations presents different considerations of fairness.
What happens if you have assets before the marriage or inherit property during the marriage, but don’t have an agreement?
As practicing lawyers in Northern Virginia, we write primarily from the perspective of Virginia law. Virginia is an equitable distribution state, as opposed to a community property state. In Virginia, this generally means that the property a person brings into a marriage or inherits during a marriage, remains that person’s property upon divorce. This is similar to what one might contract for in an agreement. Having an agreement might add some benefit if the couple expects to commingle (or combine) their individual assets in that it can establish rights and obligations. It might also add some benefit if the couple expects to move to a state with a different legal structure, such as a community property state.
If you are living in Virginia and considering a Prenuptial Agreement, we at GreenbergCostle, PC can help you analyze those choices. If you decide to enter into an Agreement, we can write one that works for you.