Has there ever been a better time to have a prenuptial agreement? The divorce rate remains at around 50% (although recent surveys have shown a decline); overall wealth is shrinking; businesses are failing and laying off workers in droves; domestic violence is increasing. Couples that are faced with divorce in this current climate are at a greater risk of plunging themselves even deeper into crisis as they seek to blame each other for all of their woes. And the children suffer the most, as they always do.
Prenuptial agreements are hardly the cure for all of the above, but for those who had the foresight to get a prenuptial agreement and are now facing divorce there is at least some certainty among uncertainty. For someone in the midst of financial and emotional crisis any bit of certainty can be a blessing. Prenuptial agreements, when thoughtfully and thoroughly drafted and finalized, can provide a great deal of guidance in a difficult time, and since they are made when the spouses generally have each other’s best interest in mind they can help achieve the most fair result when both spouses are looking out for only themselves.
Last year the Florida Legislature enacted the Uniform Premarital Agreements Act (the Act), bringing Florida in line with a growing number of states adopting the legislation. The Act gives more teeth to prenuptial agreements, closing off many of the loopholes that resulted in much litigation over the years. Prenuptial agreements that are created with the formalities specified in the Act are afforded strong legal presumptions of validity and enforcement. Specific requirements for financial disclosure are now in place, bringing even more certainty to the process.
So what can you do with a prenuptial agreement? The most common uses of a prenuptial agreement include:providing for the preservation of wealth by designating what assets and debts are non-marital in nature;allowing people with children from prior relationships to make provision for those children upon death, free from claim of their new spouse;setting forth the manner in which each spouse will be financially supported, or not, upon the termination of the marriage by divorce.
But this just scratches the surface of what is available for inclusion in prenuptial agreements. Less traditional uses of a prenuptial agreement include:establishing how a family business will be formed, capitalized and run during the marriage, and then laying rules for the continuation or dissolution of the business upon the termination of the marriage;setting forth the goals that the family will work together toward achieving and the values that they will maintain in good times and bad;determining in advance and at a time of no rancor how the family will raise their future children (religious upbringing, forms of discipline, etc.)establishing how and under what circumstances the spouses will jointly own and manage property and investments.The items that can be included in a prenuptial agreement are generally limited only by the imagination of the parties and the skill of the drafter.
The fact that no consideration except the marriage itself is necessary to formalize a prenuptial agreement makes it attractive to the financial secure, and the fact that it is extremely flexible and forward-looking makes the prenuptial agreement attractive to the rest of us. In the past, when divorce was rare, prenuptial agreements were seen as only appropriate for the super wealthy. Now they can be seen as prudent for nearly everyone.
One thing we should learn from this current economic downturn is that such contractions are inevitable on both a global and personal scale. It is prudent to take into consideration that things will look bleak at some point in the future and to plan accordingly. Nobody wants to think about the breakup of the marriage before it has even begun, but the benefits of doing so cannot be overstated. Setting down during good times what your objectives will be in bad times makes too much sense to be ignored.
If you know of someone who is going to become married in the near future then advising them to consider a prenuptial agreement may be a better gift than the crystal goblets that you were thinking about. Direct them to a Marital and Family Law Attorney with experience in drafting and formalizing prenuptial agreements. Most wedding gifts get used in the early years of the marriage and often it is forgotten what the gifts were and who gave them. But the gift of advising a prenuptial agreement has the benefit of being inexpensive in the short term and tremendously valuable in the long term.
Fear not, those of you that are lamenting not having entered into a prenuptial agreement before you became married. There is a way for you to accomplish what should have been done before the marriage. A postnuptial agreement can be created and formalized which will allow you to set down the same forward-looking goals as with a prenuptial agreement. The major difference between a prenuptial agreement and a postnuptial agreement, besides the timing of its entry and the inapplicability of the Act, is that the marriage itself is not consideration for a postnuptial agreement. With a postnuptial agreement some valuable consideration must be given in order to make the contract valid. Legal consideration can take many forms, though, and a good attorney can help you to fashion a binding postnuptial agreement that protects like a prenuptial agreement.