What is a prenuptial agreement?

Oct 01

Whenever I hear the word “prenup”, I automatically think about the song Gold Digger by Kanye West. The lyrics go, “If you ain’t no punk holla ‘We Want Prenup.’ ‘We want prenup!’” But what is a prenuptial agreement and who are they really for?

Prenuptial agreements are not just for the wealth, explains Andrea Berkowitz, a New York attorney at Stutman Stutman & Lichtenstein, LLP. In fact, prenuptial agreements can actually work for both parties, especially as couples marry later in life and have more assets.

While the conversation about signing a prenuptial agreement before marriage may be nerve-wracking and seemingly hurtful, Berkowitz explains that a prenuptial agreement can be an opportunity for the partner who is not considered the “monied spouse.” How is this possible? While one partner may have more assets and wealth than the other, the “non-monied spouse” still may have separate concerns about financial security. The prenuptial agreement can help protect the rights of the “non-monied spouse” too. Berkowitz even goes on to recommend that all couples have a clear contract before marriage.

The major concern with divorce is that one spouse may exit the workforce after children are born and have a difficult time rejoining the workforce after time away. While exiting the workforce may be a planned event for some, it becomes a necessity for others when one spouse has to care for the children and cannot work at the same time. Rather than promising re-entry into the workforce, a prenuptial agreement provides for the spouse who stays at home with the children in the event that marriage does not work out. A prenuptial agreement can ensure that the partner outside of the workforce receives a set percentage of their former spouse’s income.

The terms of a prenuptial agreement help guarantee financial support in the event of a divorce. Signing a prenuptial agreement can give both parties more freedom and security during a marriage, and help mitigate the issues of divorce if it occurs in the future.

According to the Law Offices of Baden V. Mansfield, prenuptial agreements can help with the “division of assets, visitation rights to children, custody of children”, and alimony. However, the lawyers at the Law Offices of Baden V. Mansfield explain that each prenuptial agreement is unique to the couple’s situation. By discussing the division of assets, visitation rights to children, custody of children, and alimony upfront, couples can avoid lengthy and costly divorce settlements.

Prenuptial agreements can also include “lifestyle clauses,” according to attorney Lois Liberman. Lieberman explains that some agreements include stipulations about where a child is to be raised even in the event of a divorce. She continues by explaining that “Prenups are contracts that are supposed to be utilized during death or divorce.” Some lifestyle clauses are more wild, penalizing a partner for cursing or a changing physical appearance. While it is difficult to enforce these rules during a marriage, they often can be used to penalize someone in the event of a divorce.

Prenuptial agreements are not just for the wealthy; they can be used by a variety of couples to secure their respective financial futures. While some of the lifestyle clauses are a bit ridiculous, prenuptial agreements help couples divide assets, delineate visitation rights and custody of children, and deal with alimony upfront.

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