Pre-nuptial Agreements and Divorce
27 May 2016
The recent separation of Johnny Depp and Amber Heard reminds us of how we can take measures to protect ourselves before we get married.
For some people, this might seem like a lack of trust in their spouse, but if the couple do end up with a divorce, it can help to navigate the financial and other arrangements during a really difficult time.
Good Reasons to have a Pre-nuptial Agreement
- A premarital agreement can protect any inheritance that you want to put aside for your children and grandchildren from a previous marriage.
- If you have your own business or professional practice, a pre-nuptial agreement can protect that interest. This means that the business or practice is not divided and isn’t under control by your former spouse, nor will they be involved when you divorce.
- If one spouse has significantly more debt than the other, a pre-nuptial agreement can protect the debt-free person from taking on the financial obligations of the other.
- If you plan to give up a lucrative career after you’re marriage, a pre-nup can make sure that you’ll be compensated for your sacrifice if your marriage does not last.
- A pre-nuptial agreement can address more than the financial aspects of the marriage. It can cover any detail about decision-making and responsibility sharing in the marriage which the parties agree in advance.
- A pre-nuptial agreement can limit the amount of spousal maintenance that one spouse will have to pay the other when they divorce.
- A pre-nuptial agreement can protect the financial interests of older people, those who are marrying for the second or subsequent time and people who have substantial wealth.
Disadvantages of having a Pre-nuptial Agreement
Most of these apply to the partner that is on the receiving end of the agreement.
- The agreement might mean you have to give up your right to inherit from your spouse's estate when he or she dies. Under the law, you are entitled to a share of the estate even if your spouse does not include this in their Will.
- If you contribute to the continuing success and growth of your spouse's business or professional practice by entertaining clients or taking care of the home, you may not be in a position to claim a share of the increase in value with a Pre-nup. The law considers this increase in value to be considered divisible marital property.
- Starting a relationship with a pre-nuptial agreement that lays out what will happen when your spouse dies or when you divorce, can leave a lack of trust in the relationship.
- It can be difficult to see how potential issues should be handled in the future. What may seem like an inconsequential compromise when you are in the romantic pre-marriage period may seem much more prohibitive and divisive later on.
- A low or non-wage-earning spouse won’t be able to sustain the lifestyle to which he or she has become accustomed during the marriage if the Pre-nup limits the amount of spousal maintenance.
- In the "honeymoon" stage of a relationship, one spouse may agree to terms that are not in his or her best interests because he or she is "too in love" to be concerned about the financial aspects and can't imagine the marriage ending ever.
At Co-op Legal Services we offer fixed fee Pre-nuptial agreements and once we have provided a written quote for the agreed work, that price will not change.