If you are contemplating marriage soon, you may be wondering if you need a prenuptial agreement.
In our culture, prenuptial agreements are often presented as a requirement from a wealthy family to keep someone from marrying for financial gain. However, in reality, prenuptial agreements are utilized for many different reasons. A recent survey in Axios indicates that more people are considering prenups particularly in the younger generation. As noted in the article, it is more commonly considered a part of planning a wedding.
One of the motivating factors is to agree on a division of property ahead of time so that in the event of a divorce, you have a contract that governs the division of the assets and debts instead of state laws and a judge. People are marrying after living together and being in the workforce so they may have some assets that they want to protect.
To determine if you need a prenuptial agreement, you should first understand what it is.
A prenuptial agreement is a written contract entered into by couples before a marriage to provide a disposition of assets and obligations in the event of a divorce. In Tennessee, each party must make full disclosure of assets and liabilities and each party must have time to review the agreement and consult with an attorney prior to the actual wedding if so desired.
Of the many things to discuss and consider in the planning of a wedding, a pre-nuptial agreement is not always something that immediately comes to mind but in many cases it should. There are several scenarios where a pre-nuptial agreement would be beneficial:
- If you have a child from a prior relationship and want to preserve some of your assets for that child
- If either party owns a business or is in a partnership or has some type of business ownership
- If either party is in line for an inheritance or has specific estate planning goals that includes someone other than a spouse
- One party is much wealthier or has a much greater income than the other
- One party is in much greater debt than the other
- One party may pursue an advanced degree during the marriage
- One party owns real estate or some substantial assets prior to marriage
If one of the previous applies to you and you are getting married, you may want to consider a pre-nuptial agreement:
There are pros and cons to a pre-nuptial agreement.
The cons:
- talking about these issues is not romantic
- may place a damper on the wedding plans
- causes bad feelings between the parties and their families.
The pros:
- you can designate what is separate and what is marital property,
- you can assign debt and validate your estate planning.
- you cannot contract for custody or child support because that is against public policy.
- you can specify how you would like your assets and debts to be divided in the event of a divorce and avoid a potential legal battle in the future.
- you can address the issue of alimony or spousal support but the resulting agreement cannot leave one spouse as a potential ward of the state so the terms should be reasonable
- you can consider the amount and duration of the spousal support.
Although Tennessee Courts enforce prenuptial agreement, there are common mistakes made that should be avoided in order to create an enforceable prenuptial agreement. A prenuptial agreement should not be presented to a party on or very close to the wedding day with the concept that the wedding will not take place unless it is signed. A prenuptial agreement may not be enforced if one party is coerced into signing or there is evidence of duress. Another issue is failure to disclose financial assets and liabilities. The best way to achieve a legally enforceable prenuptial agreement is to hire an experienced attorney to draft the agreement, make sure the disclosures are adequate and provide ample time for the other party to review the agreement with another attorney.
Held Law Firm is happy to help couples navigate a prenuptial agreement. Give us a call at 865 637-6550
