Are Pre-Marital Agreements Right for You?
Pre-marital agreements, also referred to as prenuptial agreements, are contracts signed by a couple before marriage. Typically, the agreement covers asset and debt distribution if the marriage ends in divorce, but it can also cover other complex issues associated with marriage. While romance leads to the wedding, marriage is still a “business” transaction of sorts. Therefore, couples may wish to protect their best interests by using a pre-marital agreement. A pre-marital agreement is often seen as a negative thing, but it offers protection for what couples cannot do: predict the future. Therefore, any couple considering a prenuptial agreement should perform their due diligence and compare the pros and cons.
What are the Pros to Pre-Marital Agreements?
- Protection of Property: A prenuptial agreement defines which premarital assets belong to whom, and what assets acquired during the marriage go to which partner in the event of divorce.
- Protecting Businesses: If one spouse owns a business, they can safeguard their interest in that business from asset division during a divorce.
- Protection from Debt: If one spouse entering the marriage has more debt, a prenuptial agreement may protect the other spouse or the community from being subject to those obligations upon marriage.
- Spousal Support Limitations: Spousal support is a highly-contested issue in divorce cases, but a couple can create a spousal support clause that dictates how much support one spouse is entitled to upon divorce, if any.
What are the Cons of Pre-Marital Agreements?
- Agreeing to Limited Assets: A prenuptial agreement may require a spouse to give up their rights to inherit. However, most estate laws will protect a spouse in the event one passes away and there is no estate plan in place.
- Lack of Trust: Some couples feel that starting a marriage based on a contract creates a lack of trust in one another or the marriage itself. Other times, couples see a contract as a proof of trust, because both know that neither party is entering the marriage for financial gain.
- One Sided Favoritism: When one side’s attorney drafts a prenuptial agreement, it may be unfavorable to the other. Therefore, it is imperative that both parties seek counsel before agreeing to execute a prenuptial agreement and also have counsel as part of the drafting and signing of the agreement.
To protect your interests or ensure you have a fair and legal prenuptial agreement, speak with a family law attorney at Udall Shumway, PLC.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Pre-Marital Agreements, or other family law issues, please feel free to contact Lindsay A.M. Olivarez at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.