In Part One and Part Two of our Prenuptial Agreement blog series, we discussed premarital and marital assets and debts, in addition to the potential issues surrounding business ownership and substantial gifts from one’s family or in-laws.
In this third and final installment, we examine the impact of components such as time and mortality, and their role in the creation of a prenuptial document.
- Duration of the Prenuptial Agreement: It is up to you and your spouse to decide how long a premarital agreement may remain in effect. Couples can ask themselves if the agreement will stand forever or if it will expire at some point:
- Should the agreement be permanent?
- Does having children change your opinion on how your agreement should work?
- What about being married 10 years? How about 20, 30, or 50 years? Would the agreement ever expire or be renegotiated?
- If you separate, does it matter who chooses to end the marriage? Why?
- Would you want the agreement to be renegotiated at a specific time, like 5 years after the marriage, or after the birth of the first child?
- Death or Disability: You will want to have a comprehensive estate plan in place soon after your wedding, particularly if you have children from previous relationships, so that your assets and debts are handled the way you intend if you were to pass away.
- Does it make a difference if you’re separated or living separately when one of you dies (even though you haven’t filed for a divorce) or if one of you dies while you’re happily married?
- Do either of you have children already, or people who’d inherit from you?
- Do you have life insurance? (Often, life insurance can be used to protect either the spouse’s interests, or your children from a previous relationship’s interests.)
- Who will you name as beneficiary on your retirement plans, IRA’s, and survivor annuity benefits on pension plans?
- Would your prenuptial agreement end on death?
- Will the surviving spouse be able to support the same lifestyle in the event of your death?
- Would either of you have immediate access to funds if one of you dies?
- Will he or she be able to maintain residence if you pass away?
- Are there certain family heirlooms or money which you’d like to make sure ends up with one person’s family?
- What would happen if one of you became incapacitated or disabled? (Would that change how finances are handled?)
- What if one of you had to use separate property to support the other person?
- Do you need disability insurance? Long term care insurance?
- Process of Separation and Divorce: You may also want to consider including a clause that says you’ll mediate any issues that come up that you can’t resolve on your own.
Another helpful clause may state that the two of you will choose to mediate/arbitrate in the event of a divorce rather than litigation.
Arbitration is quicker, cheaper, and helps involve appropriate professionals, as opposed to a long drawn out divorce process that ends with a trial and a judge who has no vested interest in your outcome.
Clearly, it’s a lot to process. If you and your fiancée are considering a prenuptial agreement, contact Milstein Siegel. Our attorneys exemplify attention to detail and can thoroughly review your circumstances with you and prepare an agreement with legally binding provisions.
To learn more, call (410) 792-2300 or fill out the form below.
