Visions of bridal parties are replete with romantic backdrops of beaming smiles, flowers, and streamers. Happiness is the mode of the day as are also expectations of a joyful future. Prenuptial activities reflect the same glowing motif of pre-wedding parties—wine and roses are the order of the day.
How does the prenuptial agreement fit into this romantic backdrop of events leading up to the marriage? The prenuptial agreement refers to a document that provides a formal road map for what will happen to assets held by either or both spouses in the event of divorce and, not infrequently, also in the event of death. Indeed, the prenuptial agreement may in fact be more adventurous; striking out into areas that pertain to the roles each will assume in the marriage or may deal with other issues that concern either party. However, the main focus is typically how to handle assets, liabilities, and money in general during the marriage and/or if the marriage ends in divorce or death. Admittedly, this is not a romantic topic and, in some instances, the very effort to draft a prenuptial agreement results in the couple’s breakup.
Let’s examine prenuptial agreements a bit closer, by asking some relevant questions:
What is a Prenuptial Agreement?
A prenuptial is an agreement between two individuals before marriage in which they define what will happen to assets and perhaps also income in the event of divorce and/or death. Some prenuptials are much more expansive, stipulating how income and/or assets will be handled during the marriage and terms for spousal support in the event of divorce. The agreement is not submitted to the court for approval unless the couple is divorcing or, in the event of the death of one party, if the terms of the deceased’s Will conflict with the couples’ prenuptial agreement.
In Massachusetts there are three cardinal rules to be followed in order to ensure, as much as is possible, that the court will uphold the prenuptial agreement.
The agreement was not entered into on the “eve” of the marriage, meaning that one party did not require the other to sign if the marriage is to go forward.
The couple exchanges full financial disclosure of assets, liabilities, and income held by each one and, if relevant, anticipated in the future.
Each party has legal counsel to review the terms of the agreement and ensure that the prospective spouse understands how the Agreement relates to marital law.
Who Are the Individuals Who Want Prenuptial Agreements?
Individuals, marrying later in life, who have amassed assets that they do not want to share in the event of divorce or individuals who are marrying after the divorce or death of a former spouse and have children that they wish to protect, as beneficiaries of their estate in the event of divorce and/or death. Not surprisingly this situation may relate to only one member of the prospective couple.
Individuals who anticipate receiving assets in the future through inheritance or other means (e.g., stock options, sale of business.) This population may not, themselves, worry about future events, but instead reflect, in their request for a prenuptial, the wishes of family or others who want to see assets protected.
Individuals who want a separation of assets, debts, and /or income to be maintained during the marriage.
How Do You Structure A Prenuptial Agreement?
Prenuptials are not all created equal. Some couples deal only with the value of assets/liabilities that they bring into the marriage. Others deal with how these assets are treated during the marriage, with respect to their growth and usage.
Some couples create prenuptials that change over time. In general, the longer the marriage, the more generous are the terms for the individual who had, or has, less assets. At times the prenuptial has an expiration date. And, at other times, divorcing couples agree that the terms of prenuptial agreement, in whole or in part, should not be followed.
Mediation offers a creative, constructive, and rational approach to the crafting of prenuptial agreements. Since both parties’ ideas and points of view are critical to the process, couples need to listen and be listened to if the process is to be successful. Within the larger context of being a couple, priorities, needs and concerns of each party shape the dialogue and the resultant agreement. Working together eliminates the individual struggles that result from each party presenting to the other a lawyer/driven agreement that works best for one party.