Tiger Woods has one. Madonna and Guy had one. Donald Trump has had several. Of course, I’m speaking of prenuptial agreements. With the nationwide divorce rate at approximately 50%, and even higher for second marriages, it’s not difficult to understand why. Prenuptial agreements can address the division of property in the event of a divorce, spousal maintenance (alimony) and may even require both spouses to maintain strict confidentiality regarding the reasons for the divorce and the terms of the divorce in order to qualify to receive payments under the premarital agreement.
Premarital agreements will generally be enforced provided they meet these statutory requirements and provided that each party has individual counsel. Premarital agreements can be particularly important where one spouse brings significant assets into the marriage which he or she wants to be sure to receive free from any claim by the other party in the event of a divorce.
For example, if a man enters a marriage with a valuable business he owns and operates, a premarital agreement can specify that even if the husband continues to expend money and his time to build up the business during the marriage, his wife will have no claim to the business in the event of a divorce. Without a premarital agreement, the wife might have a significant claim to the business.
Likewise, if a woman enters a marriage already owning a home with significant equity, a premarital agreement may provide that any mortgage payments or other funds used to maintain or improve the home during the marriage will not result in her husband’s having a claim to the home. In the absence of a premarital agreement, the husband might have a significant claim.
In most instances, a premarital agreement can effectively eliminate or significantly reduce claims for alimony (spousal maintenance) which might exist if there were no premarital agreement. A premarital agreement can even provide for escalating payments from one spouse to the other based on the number of years the parties remain married.
Are premarital agreements always necessary or appropriate? Certainly not. In the case of a first marriage for a young couple, neither of whom bring any assets of significant value into the marriage, the primary effect of the prenuptial agreement might only be to undermine the marriage and create undue stress in the months leading up to the wedding.
In second or third marriages, however, and in any situation where one party has accumulated significant assets which he or she wishes to preserve in the event of a divorce, a premarital agreement is advisable. Premarital agreements are much more common in those contexts than in the case of first marriages of young couples who are just starting out financially, so broaching the subject of a prenuptial agreement in those contexts is not so likely to cause strife in the relationship. In addition, planning ahead and completing the prenuptial agreement several weeks or even months prior to the wedding will allow the tension which invariably accompanies the drafting and negotiating of a premarital agreement to pass and be long forgotten by the time the big day arrives. Come the wedding day, the happy couple should be able to look each other in the eyes and wholeheartedly commit to the other “for better or for worse.” Maybe.