Prenuptial Agreements – Benefits and Mistakes to Avoid

Who Needs a Prenuptial Agreement?

Not everyone considering marriage will need a prenuptial agreement, but there are a few categories of people who should consider having a prenuptial agreement before the wedding. If either or both parties have significant assets, a prenuptial agreement may be right for your situation. Similarly, anyone who owns a business prior to marriage or has a lot of investments should consider consulting with an attorney to decide if a prenuptial is right for your situation. Also, if you’re marrying someone who is not as financially secure as you are, it’s probably a good idea to have a prenuptial agreement in place to protect your assets.

When the marriage will be a second or third marriage for either party, a prenuptial agreement is likely a good investment to protect both parties and any children of the prior marriages. If either party has received a significant inheritance or assets from family prior to the engagement, a prenuptial may be a good idea. A prenuptial agreement can help ensure that you keep your assets in case of a divorce.

How Much Will a Prenuptial Agreement Cost?

If you’re considering a prenuptial agreement, it’s important to understand the typical cost. Prenups can range in price from $5,000 to $25,000 or more, depending on the complexity of the premarital estate. Normally, attorneys will charge their hourly rate for preparing these agreements, plus a retaining fee.

This process may seem like overkill in some situations. Many times, prenuptial clients will balk at the amount of financial information needed for an attorney to properly advise them through this process. However, in the event of a divorce, having a well-drafted agreement can literally be worth thousands (or even millions) of dollars in assets that you don’t have to pay out to an ex-spouse.

How Long Does the Prenuptial Process Take?

The process typically takes six to eight weeks, if necessary, but that means it’s imperative to start the process as soon as possible. It may seem awkward to have such a frank discussion with someone you’re so emotionally involved with, but by facing these issues early on, you will save yourself headaches and potential heartache by waiting too late to discuss it. You don’t want the added stress of discussing your premarital contract with your spouse or attorney too close to your wedding date. The time frame for entering a prenuptial agreement is different for every couple, but we suggest completing and executing one no less than 30 days prior to the wedding date. Most engaged couples keep a checklist of items that need to be completed prior to the big day – make sure that finalizing your prenuptial agreement is on that list.

In most cases, either the party in the stronger financial position (who earns the most income and/or has more assets) or the party who requested the prenuptial agreement will retain an attorney to prepare the agreement. The other party will then hire his/her own separate counsel to review and negotiate the terms of the agreement, which often includes making suggestions for possible changes and edits.

In most states, the recommended practice is that the final draft of the prenup must be presented to the party whose attorney has not drafted the agreement at least seven days before the prenup is signed. Once a draft has been approved by everyone, the parties and their respective attorneys will execute the agreement and required supporting documents, and official copies are given to the parties and held in each attorney’s files.

Common Premarital Agreement Mistakes to Avoid

While prenuptial agreements are becoming more common, every state handles them a bit differently. There are some general rules to follow to avoid having the agreement deemed “invalid” if it’s ever time to enforce the terms.

Here are some mistakes commonly made that you should try to avoid:

• Using the Same Legal Representation – Both spouses should always have separate attorneys. This will ensure that each client understands the prenuptial agreement independently of the other spouse. Also, it will help ensure that the signing of the final agreement is done voluntarily and without one spouse feeling pressured into it.
• Signed Under Duress – A prenuptial agreement will be invalid if one party was pressured into it or if they are under the influence of drugs or alcohol or anything that would render them unable to fully understand what they are signing.
• Signed Too Close to the Wedding – Don’t leave the prenuptial agreement signing to the very last minute. Make sure the prenuptial agreement is signed well in advance of the wedding date. Each spouse should have enough time to consider and understand what they are signing and fully discuss the implications of the contract with their separate counsel to ensure they are fully agreeable with all the terms.
• Failure to Give Full Disclosure – Make sure all – yes, ALL – assets and debts are disclosed.
• Oral Agreement – The prenuptial agreement should be in written form, using language approved and accepted by the jurisdiction in which it’s drafted. There should also be multiple signed copies kept: one for each spouse and one for each spouse’s attorney.
• Ambiguous Terms – If the agreement is not clear on its fact or has ambiguous language or provisions, it can be challenged in court. If a judge cannot decipher clearly what the intent of the parties was at the time of signing, it will likely be found invalid.

Conclusion

If you have significant assets, have been married before, or have an inheritance to protect, you should execute a prenuptial agreement. Prenuptial agreements are not just for the wealthy; they can benefit any couple who wants to ensure their property is divided fairly in the event of a divorce. However, when you and your fiancé decide this is something you might need, hiring experienced family law attorneys to assist with this process is critical to avoid mistakes that could render the document useless.

If you and your spouse don’t have a prenuptial agreement and you get a divorce, your property will be divided according to your state’s asset division laws. This may not be what you want or what is beneficial to your future. If you’re in South Carolina, it’s important to contact an experienced family court attorney like J. Benjamin Stevens to discuss your prenuptial options before getting married. Even if you aren’t in South Carolina, Mr. Stevens can offer referrals to a well-qualified attorney located in your state.

Ben Stevens has provided exceptional legal counsel and support to families throughout South Carolina for over twenty-five years, handling all matters of family law, such as prenuptial agreements, divorce, separation, alimony, and child custody. Our firm is well-equipped to handle all divorce and family law matters, no matter your circumstances. Contact our office at (864) 598-9172 or SCFamilyLaw@offitkurman.com to schedule an initial consultation.