If you’re thinking about having a prenup drawn up before you tie the knot in Cobb County or elsewhere in metro Atlanta, you may want to find an attorney who focuses on estate planning, too. Perhaps surprisingly to some, a prenuptial agreement can be a key piece of estate planning documentation. Many couples in metro Atlanta see the importance of creating a binding prenuptial agreement in order to protect their assets and plan for their future.
Today, blended families are far from unusual. During the newlywed planning phase, the couple needs to consider what happens to “yours, mine, and ours” in the event of divorce, as well as death. You may each have certain items or financial support that you want designated specifically for your own biological children, and a prenup in combination with estate planning documents is used to make these wishes known.
This is also the case when older couples marry. They may each have their own grown children and grandchildren that they wish to provide for. Without the proper agreements, a surviving spouse will often become default heir to the other’s estate, allowing the spouse to do with it whatever he or she sees fit. It could be perfectly legal for the deceased spouse’s children to inherit nothing.
Working with an Atlanta area prenup lawyer before exchanging vows can help to clarify each partner’s wishes, as well as to provide legal documentation. Simply discussing your preferences is not enough, either. To be binding, the prenuptial agreement must be in writing, and both spouses must sign it. In fact, it is necessary for each spouse to take the appropriate amount of time to read the entire document to ensure that he or she agrees with it and is not being pressured into signing something.
A prenup that seems grossly unfair to one spouse or the other may not hold up in court, so this step is pretty important. Some states even require that each party is advised by his or her own prenup lawyer rather than sharing the same attorney. If one spouse omits information or outright lies about it in the prenup, that can also render it invalid.
While creating a prenuptial agreement may not be the most romantic way to go into a marriage, it can be important from an estate planning point of view. It allows you to plan for the future and to designate your own heirs. Some people who skipped this step are now coming to prenup lawyers to request “post-nuptial agreements.” These documents work quite similarly to the prenuptial agreement but are simply done after the wedding is over. It’s best not to wait, but if you have to, a metro Atlanta prenup lawyer can still get the ball rolling for you.
If you’re ready to get started with this process, we invite you to call our office at 770.425.6060 and ask to schedule a free Georgia Family Treasures Planning Session ( a $750 value).
Think “prenuptial agreement” and you think “I love you!”, right? Perhaps not! In my Marietta and Atlanta divorce and family law firm, I find that even though an important legal document like this can protect your bank account and other assets, many folks consider a prenup as a dealbreaker. According to Casey Bond, in an article published at GoBankingRates.com, asking for one can be construed as lack of trust by the party requesting it. Thus, it can be a challenge to persuade a potential spouse that having a prenup is a good idea when they have this attitude. This post summarizes Ms. Bond's article on the radical concept of using postnuptial agreements to save a troubled marriage.
On the flip side, many engaged couples believe that signing a prenup is equal in importance to the marriage preparations as it is to reserve the church and register for gifts. But suppose you and your spouse chose not to enter into a pre-marital agreement concerning your finances and you now regret that choice? Your answer may be a postnup instead.
Prenup and Postnups : The Differences
Postnuptial agreements, often called post-marital contracts, are much less commonly used than prenups, but their popularity has been increasing in recent years. Essentially, these two contracts are created for the same purpose, but a postnuptial agreement is made after a couple has been married instead of doing it before the wedding.
The postnup’s purpose is to protect each spouse’s individual income and assets in case the marriage ends, whether as a result of divorce or death of one of the spouses. They are widely used in community property states where entitles one spouse is automatically to the other spouse’s assets when they become married. Remember, though, that every state’s laws and requirements surrounding postnuptial agreements are different.
Postnuptial Agreements: Who Needs Them?
Please understand that signing a postnup does not mean that you expect your marriage to end in divorce. These documents certainly are not for everyone, but a postnup can do a lot of good for many marriages under special circumstances:
Revising a Prenup: Many couples who choose to create a postnuptial agreement already have a prenuptial agreement in place. A postnup is often needed when one spouse has a significant shift in finances, like a promotion or inheritance, and the spouses find it necessary to modify the terms of the original prenuptial agreement. Indeed, there can be numerous changes to a postnup as the financial situation within a marriage changes over time.
Protect a Business: Many business owners will want postnups because a divorce could seriously threaten assets of the business or adversely affect outside partners and investors.
Fights About Finance: Any married person knows that finances and money are often a great source of strain on the relationship. This may be more true for some couples than for others. Occasionally couples who frequently argue over their finances and at risk of divorcing over the subject find that a postnuptial agreement can relieve that stress and once again strengthen the marriage.
Adultery: Postnups are also frequently used as resources for managing an unfaithful spouse. In marriages where a spouse has strayed and engaged in an adulterous relationship with another partner, the other may require in a postnuptial agreement that if it occurs again, the philanderer must pay a large amount of cash to their husband or wife. The question of whether or not this will actually improve the marriage is open to question.
Creating a Postnuptial Agreement
If you are already married and you believe the two of you need a postnuptial agreement, you should understand that the process is not as simple as writing up who-gets-what in case you get divorced and having a lawyer approve it. In Georgia, for a post-marital contract to be enforceable, both parties should have individual legal representation, they must provide full disclosure of each party’s financial situation (i.e., no secret bank accounts) and the contract should be reasonably fair to both parties.
In summary, if you find yourself in one of the categories listed above, You might can benefit greatly from having a postnuptial agreement and it could well be beneficial to create one. Whether it’s a business requirement, or whether it could actually save your marriage, if you believe a postnuptial agreement is a good idea, discuss it openly with your spouse. He or she may agree it is a good idea, too.
In our Marietta family law firm, we frequently prepare post-nuptial agreements and pre-nuptial agreements. Please contact us at 770-425-6060 to schedule a Georgia Family Law Strategy Session to discover more about these documents and whether they are appropriate for you and your spouse or spouse-to-be.
SOURCE FOR POST: Could a Postnuptial Agreement Save Your Marriage?, by Casey Bond in GoBankingRates.com
The following article, written by Michigan divorce and family law attorney, Jeanne Hannah, appeared in a Michigan newspaper recently. I have removed the references to Michigan law for this post:
People ask: “Would we ever have to go to court to enforce a prenuptial agreement?”
There are times that one party challenges the validity of a prenup. If that occurs at the time of a separation or divorce (or sometimes after death), there may be a trial. The judge will weigh the evidence and the credibility of the witnesses before deciding whether to enforce the agreement. These cases are fact-dependent. The judge will decide if the agreement is enforceable only after resolving any disputed facts.
Will state courts uphold prenuptial agreements?
Yes. The right of competent adults to enter into a contract will be respected by a court. Times have changed since the days of Ozzie and Harriet, and prenups are no longer against public policy. Because important rights are being disposed of in a prenup, a party asked to sign one should ask a lawyer to explain exactly what the impact of the agreement is. What property rights or what rights to support would the person have under state law if there were no prenuptial agreement?
A well-drafted prenup will contain a provision that each party has read the agreement and understands the terms of it. It will likely also say that each party was represented by counsel or had the right to be represented, but waived that right. Those “boilerplate” terms will make it difficult or impossible to set aside an agreement once it’s executed. Therefore, it’s very important for each party to know exactly what rights he or she is giving up.
Are all prenuptial agreements enforceable?
No. The facts and circumstances surrounding the execution of a prenup might cause a trial court to invalidate it later. The law of each state will govern whether or not a prenup is valid and enforceable. Some states will enforce a prenup in the same way it enforces any contract; if the terms of the agreement are clear and unambiguous, then a court will enforce it as written, even if it isn’t fair and equitable. In other states, the court may find the agreement clear and unambiguous, but invalidate it because it’s “unfair” or “unconscionable.”
When will a court generally enforce a prenuptial agreement?
Enforceability and validity will vary from state to state. The following guidelines should be followed to ensure enforceability of a prenuptial agreement:
• The Agreement should be written in clear and unambiguous language, and should fairly and accurately describe what rights and obligations each of the parties has in any of the property owned by either party (or both).
• The Agreement should be specific about determining the rights and obligations with respect to property (and debt) owned prior to the marriage or property (and debt) acquired during the marriage, or both.
• The Agreement should be in writing and signed by both parties prior to the marriage.
• A prenup should not be executed on the day of marriage or even a week before the marriage. It’s important to establish that both parties have had ample time to review the agreement with a lawyer prior to the marriage.
• Both parties to the prenuptial agreement should have separate legal counsel.
• The prenuptial agreement should be entered into voluntarily; it should not be unconscionable. In other words, it should not be so one-sided and oppressive that no person in his or her right mind would sign it without duress, coercion, or fraud.
• Each party should provide a specific disclosure of his or her financial information. Some courts will enforce a prenuptial agreement if the parties have waived that disclosure. The disclosure should be in writing, attached to the agreement, and incorporated by reference within the agreement.
• Enforceability is more certain when the prenuptial agreement does not harshly and unfairly eliminate a party’s rights to property acquired during the marriage.
How long does it take to draft and sign a prenuptial agreement?
The amount of time that it takes to draft and sign a prenuptial agreement depends upon several things, mainly how complex the parties’ estates are and whether they have children from a former marriage. It can be time-consuming if substantial negotiation is required.
Is it a good idea to buy a pre-printed generic prenuptial agreement from a website and fill in the blanks? Will this protect us?
No. Active involvement of an attorney or attorneys to represent each party is important. Finding a lawyer whose practice is focused on family law will ensure that the lawyers drafting the agreement are familiar with how the laws of the state will look at enforceability of the agreement to uphold the parties’ intent. A specialist in family law will be intimately familiar with current law in the state where you live. Moreover, there are numerous complexities that should not be attempted to be resolved with a “one-size-fits-all” generic agreement. Additionally, when choosing a specialist in family law, you’ll benefit by knowing the personal reputation of the lawyer you choose. You’d have no way of knowing the identity, the experience, the educational background, the level of expertise, or the reputation of the person who prepared a generic prenuptial agreement. You’ll have no way of knowing whether the generic agreement has taken into consideration the current state of the law in your locale.
Is it a good idea to address the issue of “commingling” of separate property in a prenup?
Yes. In most marriages commingling of assets occurs. Sometimes people have a prenup and they simply fail to understand that the prenup will not protect them as was intended if it doesn’t carefully address the issue of commingling. For example, if one of the parties uses his or her separate assets to pay marital bills, the laws of most states will consider that they have intended to gift the other spouse by those expenditures and there will be no reimbursement if the marriage ends by death, separation, or divorce.
If separate monies are used for a down payment on a house or other property that is titled jointly, laws in some states will allow traceable assets to be considered as separate property. But in other states, the law will consider those separate monies to be “commingled” with marital assets, and will consider that the monies are “transmuted” or changed into joint marital property or community property. If the parties intend that they may use some separate property to acquire other different property that they will title jointly and that in doing so they will not lose their right to claim that the monies invested in this different property are still their separate property, then they should make that clear in a prenup.
Failure to have the prenup specifically address these issues may lead to prolongation of litigation at the time or separation or divorce and may cause serious problems if one party predeceases the other, and each party intends for his or her estate to benefit surviving children from a former marriage, the jointly titled property will pass as a matter of law to the surviving spouse. Unless each party’s interests have been clearly defined, assets intended to remain separate can end up, ultimately, in the hands of the non-owner spouse’s children. For this reason, it’s important to set forth the intent of the parties clearly in the prenuptial agreement.
What is meant by “separate” assets vs. “marital” assets?
Separate property is what each spouse owned at the time of the marriage, and should include liabilities at that time as well. Generally speaking, marital property is everything that is accumulated during the marriage from the joint efforts of each party, each acting in his or her respective roles.
When a couple divorces in some states, each party keeps his or her separate property owned prior to the marriage so long as it was maintained in the property owner’s sole name during the marriage and not commingled with marital assets. Some states will allow some commingling and still protect separate assets if they can be “traced” or specifically identified as, for example, “the down payment for the house.” for example.
It’s becoming more common in these days of upscale living that both parties work, bringing in two incomes to support the family’s lifestyle. However, it remains true today, as it did 20 or 30 years ago, that if a wife (or husband as the case may be) is a stay-at-home parent who cares for the parties’ children and home, and who facilitates the other spouse in his or her career endeavors by making it possible for the working spouse to be free to do what it takes to build a business or advance a career, that a court will consider that the “non-working spouse” is contributing in his or her respective role to the accumulation of marital assets. Therefore, the term “joint effort of the parties” doesn’t necessarily mean that one spouse is contributing money to the family coffers. That spouse will generally be awarded half of whatever is earned and accumulated between the date of the marriage and the date of separation or divorce.
If the parties have not reached an agreement when divorcing, the court divides the marital property in the proportion that it deems “just” after considering all relevant factors. If you entered the marriage with a house or investment portfolio or an inheritance, and kept title to those assets separate during the marriage, these assets will be considered your separate assets and not subject to division. There are two exceptions to this rule, however.
The increase in value in separate assets during the marriage may be considered joint if your spouse contributed to its appreciation. Usually the court considers passive appreciation separate property, but active appreciation is subject to division. Sometimes assets purchased with income from your original assets, will be considered marital property and subject to division upon divorce.
If my intended asks me to consider a prenuptial agreement, what should I be concerned about?
Keep in mind as well, that income contributed during the marriage to a retirement plan (such as a 401(k) would be considered marital property. Consequently, upon divorce, the court could grant your spouse certain rights to your retirement plan account accumulated during the marriage. The parties should address some element of fairness in the prenup. It wouldn’t be fair, for example, if one party were permitted by the agreement to protect income earned during the marriage by building up equity in a separately titled property while, under the agreement, the other party’s income is allocated for paying general family expenses. If this were the case, then if the parties separate or divorce, the first party would end up with substantial equity while the other’s wealth would have been poured down a rat hole.
A prenuptial agreement allows the engaged couple to alter the definitions of separate and marital assets in order to protect their assets and control distribution of assets upon death or divorce. It’s important that both parties exercise tact and are fair with each other. Don’t sign a prenup that seems unfair. Let your lawyer negotiate an agreement that levels the playing field and protects your interests.
Does my prenup need to address liability for debts incurred in connection with the ownership of separate property before or after the marriage?
It can and it should.
Does a prenuptial agreement mean the parties don’t trust each other?
Maybe, but a prenuptial agreement usually is grounded in realism rather than a lack of trust. For older couples who are marrying a second time, the parties simply want to protect their children. Younger couples may simply feel that a prenuptial will save expense later if the marriage does not work out.
It is important to approach marriage as a partnership and to approach a prenup with a sense of fairness. It’s not uncommon for one spouse to be the wage-earner, while the other is a stay-at-home parent and/or the cheerleader for the spouse who is building a career or a business. While the marriage may seem like a partnership, things can and do get ugly in a divorce. On the one hand, the worker bee may feel that it’s unfair that he or she (usually he) has to split his hard-earned pension or the value of a business built during a marriage. On the other hand, if the stay-at-home spouse hadn’t been there building and caring for the nest, freeing up the worker bee for career-promoting travel and development, then the business prospects might not have panned out so well.
Retirement accounts are really only deferred income — income that would be marital if it had otherwise come into the marriage as savings or had been used to purchase a jointly titled asset. It’s not fair to penalize the stay-at-home spouse by allowing one spouse to leave the marriage with assets that are truly marital in character, if not title.
Thus, it is important when discussing the terms of a prenup that parties have reasonable and fair expectations. Think of marriage as a partnership and build incentive for both partners to contribute to the well-being of the partnership. For sure, it will be easier to be fair at the beginning of a marriage than after the relationship has turned sour. This is why both parties should have separate legal representations to protect their interests.
SOURCE: Traverse City Record-Eagle in an article written by Jeanne Hannah
Nobody wants to think at the beginning of a marriage that it will ever end in divorce. However the statistics on divorce in the United States cannot be ignored. Here are some examples:
o In 2003 2.3 millions couples married and 1.3 million couples divorced.
o In 2003 the Bureau of the Census projected that 4 of 10 first marriages will end in divorce.
o People between the ages of 25 to 39 make up 60% of all divorces.
o Over one million children are affected by divorce each year.
o Approximately 1/3 of divorced parents remain bitter and hostile several years after the divorce.
o 75% of women and 80% of men remarry within 5 years after divorce.
o Second marriages are at greater risk of ending in divorce that first marriages.
o More people are part of second marriages today than first marriages.
The sad fact is that, in more than half of the cases, marriages have a beginning, a middle, and an end. And anyone who has been through a divorce will tell you that, without a prenuptial agreement, the end of a marriage can be a litigation nightmare for the parties, for their children, and for other family members.
A properly drawn and executed premarital agreement provides the parties with a measure of certainty as to how property and debts will be divided at the end of an unsuccessful marriage and may greatly reduce or even eliminate the issues which must be expensively litigated. The trouble and expense of drafting and executing a prenuptial agreement generally does not begin to compare with the trouble and expense of the legal battle resulting from the absence of a prenuptial agreement.
A prenuptial agreement is a contract between two people about to get married that shows exactly how assets will be distributed in the event of divorce or death. Such agreements have existed for thousands of years in some form or another. In an article published at Excel Articles Directory, Michigan divorce attorney Jannelle J. Zawaideh discusses categories of people who should consider having a prenuptial agreement, what a prenuptial agreement can do, and other reasons for having a prenuptial agreement.
She notes that a common myth is that prenuptial agreements are only designed for very wealthy individuals and this is not necessarily true. A person who has managed to save $25,000 may be more protective of their little nest egg than someone who has millions.
According to Ms. Zawaideh, you should consider having a prenup if you fall into any of the following categories:
- You have assets such as a home, stock or retirement funds
- You own all or part of a business
- You may be receiving an inheritance
- You have children and/or grandchildren from a previous marriage
- One of you is much wealthier than the other
- One of you will be supporting the other through college
- You have loved ones who need to be taken care of, such as elderly parents
- You have or are pursuing a degree or license in a potentially lucrative profession such as medicine
- You could see a big increase in income because your business is taking off, or that garage band you play in has just gotten a contract with a big record company.
It is essential that the prospective spouses hire separate attorneys It would be in your best interest to hire separate prenuptial attorneys. Without that, there could be a construed conflict of interest. Many prenup agreements have been thrown out because an aggrieved spouse did not have legal representation. The attorneys co-write the agreement with their clients’ best interests in mind.
The author also describes what a prenuptial agreement can do for you:
1. Keep finances separate. Every state has laws designating certain kinds of assets accumulated during marriage as marital property or community property, even if these assets are held in the name of just one spouse. If a couple divorces, or when one spouse dies, the marital or community property will be divided between them, either by agreement or by a court. If you want to avoid having some or all of your individual accumulations during marriage divided up by a court, you can do so with a premarital agreement.
2. Protect each other from debts. Some of us bring debts, as well as assets, to a marriage. If there’s no prenup, creditors can sometimes turn to marital or community property to satisfy the debts of just one spouse. But if you want to make sure that saying "I do" does not mean saying "I owe," you can use a prenup to limit your liability for each other’s debts. Provide for children from prior marriages. A prenup is helpful (perhaps essential) if either of you has children from another relationship and you want to make sure that your children inherit their share of your property. In a prenup, one or both spouses can give up the right to claim a share of the other’s property at death, perhaps in exchange for an agreed upon amount of property.
3. Keep property in the family. If your property includes something you want to keep in your birth family, whether it be an heirloom or a share in a family business, you and your spouse can agree that it will remain in your family, and you can specify that item in your prenup. This can even include property that you expect to receive in a future inheritance. Follow through by making your estate plan. In addition to using your prenup to waive inheritance rights and state your intentions for passing on your property at death, it’s vital that you prepare the estate planning documents — a will, living trust, and so on — that actually transfer your property as you intend.
4. Define who gets what if you divorce. Without a prenup, state law will specify how your property will be divided if you ever divorce. These laws may dictate a result that neither of you wants. You can use a prenup to establish your own rules for property division and avoid potential disagreements in the event of a divorce. In most states, you can also make agreements about whether or not one or both of you will be entitled to alimony. Some states forbid or restrict agreements about alimony, however.
5. Clarify responsibilities during the marriage. Some examples of other matters people have included in their prenups: whether to file joint or separate income tax returns or to allocate income and tax deductions on separate tax returns
- Who will pay the household bills — and how whether to have joint bank accounts and, if so, how to manage them agreements about specific purchases or projects, such as buying a house together or starting up a business
- How to handle credit card charges — for instance, whether you will use different cards for different types of purchases, what kinds of records you will keep, and how you will make payments agreements to set aside money for savings agreements for putting each other through college or professional school
- Whether you will provide for a surviving spouse — for example, in your estate plan or with life insurance coverage, and how to settle any future disagreements — for example, you might agree to hire either a mediator or a private arbitrator.
As in Georgia, the author stresses that the most important ingredient of a solid prenuptial agreement is honesty. Both parties must FULLY disclose their assets. If it turns out either person has hidden something, a judge can toss out the contract.
It is also important that to enhance enforceability, an agreement must also be signed well in advance of the wedding. You can not present your significant other with a prenup the day before the big day and think you can rush them into signing it without careful consideration.
The document should be signed as early before the nuptials as possible to avoid the appearance of coercion, another key reason why some agreements are rendered null and void.
It is recommended to plan ahead and have the prenup agreed upon at least one month before the wedding and preferably before the invitations have been sent out to make sure you are both on the same page. Nothing would be more embarrassing than to cancel a wedding after the invitations have went out all because you could not agree on the prenuptial agreement.
A valid prenup also is "fair" and will not leave one of the parties destitute. No matter what state you’re in, the state will look for equity to make sure one spouse is not being taken advantage of.
Finally, she discusses how prenups can include responsibilities that don’t deal with money, but discourages you from making demands that might seem frivolous, such as requiring that your spouse not gain weight, or that he or she quit smoking and take out the garbage three times a week.
SOURCE: 7 Reasons You Better Get A Prenuptial Agreement an article by Jannelle J. Zawaideh, published at Excel Articles Directory
From Best Syndication comes Purpose of Prenuptial Agreements. Some good reminders of points I have brought up before.
"To be specific, prenuptial agreements are signed and notarized contracts that draft how financial aspects of a marriage will be handled. Although they’re not very exciting, having an honest financial discussion before a wedding can be a genuinely beneficial and positive experience."
Prenuptial agreements help spouses face their financial matters. Ambitions shouldn’t be the only thing you two discuss. Discussing your current financial situation is not only important for your spouse, but is important for you too. There shouldn’t be any secrets between spouses; to me not using a prenup indicates a lack of trust, not the other way around.
Another benefit to using prenuptial agreements is that they allow spouses to preserve family ties and inheritance. For some people, prenups are essential just for this reason. For example, if you had two children before marriage, you can ensure that assets you’ve set aside for them are protected. No probate court could dictate those assets be transferred to the other spouse.
Prenuptial agreements are also beneficial for protecting a business owner’s business asset. Often times spouses will fraudulently claim they have a stake in the other spouse’s business, and probate courts often fall for it. Even my aunt was able to get thousands of dollars a week this way by claiming a stake in her ex’s business. Using a prenup to describe a spouses accumulated business asset’s before marriage will ensure their stake in the business is protected. If your spouse did want to help out with the business later on, you could always use a partnership agreement.
SOURCE FOR POST: Sam Hasler’s Indiana Divorce & Family Law Blog