Our founder, Kristyn Carmichael, was recently interviewed by "Comparison Advisor" regarding expert advice on whether you need a prenuptial agreement (prenup). As Couples Solutions Center helps couples in premarital mediation, as well as divorce mediation, we have a unique insight into the creation of prenups and how they later impact a divorce.
1. What is a prenuptial agreement and how does it work? As an advisor, how might you introduce it to clients?
A prenup (also known as premarital agreement) is a contract between future spouses as to how they would like to distribute their property should they divorce in the future. We like to explain it as insurance. you buy car insurance, but don't plan on getting in an accident. You buy home insurance, but don't plan on there being a fire. A prenup is insurance in case you get divorced, although we always want our clients to stay together forever if possible. I introduce couples to prenups when they are contemplating marriage. In premarital mediation we discuss not only a prenup, but communication, finances, and expectations - to set a solid foundation for a marriage to begin. It is always surprising how many couples avoid these challenging conversations (prenup or not) that will have a drastic impact on the success of their marriage.
2. What factors should couples discuss and/or consider before deciding to get a prenup?
Something to remember is everyone has a prenup - aka divorce law. The state you get a divorce in dictates how your property should be dispersed upon divorce and what is "fair" for support, such as alimony (spousal maintenance or spousal support). So your prenup is state law. You can choose to go with state law, or choose your own agreements by creating your own prenup. So a prenup is appropriate for anyone who wants control of their divorce rather than a court or the state being in control of it. Prenups are also helpful for those who:
1. Have drastically different income capacities
2. Own property prior to marriage
3. High net worth individuals
4. Have children with other partners prior to marriage
5. Will or have received inheritance from a family members or someone else
6. Anyone who wants to be thoughtful about their finances in their marriage
3. Are there types of couples that need a prenuptial agreement more than others?
Not particularly. As mentioned above, a lot of varied clients could benefit from a prenup.
4. What are the benefits of signing a prenup for both the couple and the individual?
First, a prenup helps you open up to your spouse regarding your wants, needs, and finances - and vise versa with them opening up to you. This creates a solid foundation of trust and allows for productive discussions that can help strengthen a relationship.
Second, financial disclosure is required prior to getting a prenup. This allows couples to truly understand the entire financial picture they will have married, or for individuals - what finances are they marrying into. This could be as simple as: is my future spouse a saver or spender? What do they prioritize with their finances?
Third, it provides individual protections if something were to happen to the marriage in the future. It provided individuals some certainty and control over their futures.
5. What are the negatives of signing a prenup or having discussions about it?
The only big negative I see is not related to signing the prenup, but the process by which a prenup is handled. In most cases, one person will have a prenup drafted that benefits themselves and hand it to the other person (fiance) to sign. This isn't a trust building process or opening lines of communication. This is one person protecting themselves, often with little regard for the other person. And this is why a prenup gets a bad perception in the media and public.
In premarital mediation, we open lines of communicate, help build trust, and guide the couples in finding mutually agreeable solutions. Even if some clauses may benefit one person, the other partner has a deep understanding of why and is present in the creation process. So prenups aren't inherently wrong - but the process can be.
Read the full article HERE.
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