You might know them better as prenuptial agreements or prenups. A premarital agreement is a legally binding marital contract that the betrothed couple agrees upon and executes prior to marriage. These contracts often receive "bad press," if you will, because many believe that entering into a prenuptial agreement prior to the marriage is already signing the divorce papers, and nothing could be further from the truth.
Entering into a prenuptial agreement actually solidifies a marriage rather than sets it up for failure. When the couple begins its union with a clear understanding of what is expected and what will be expected in the future, the foundation upon which the marriage will be built is already solid. Each person possesses a knowledge and wisdom that is generally otherwise left to question, because important details have already been hashed out.
The Institution of Marriage
Marriage isn't just the romantic ending to a fairy tale. Marriage is a legal binding of two people and everything they have and will have in the future. Individual property is generally brought into a marriage, and additional property is accumulated during the union. Instead of considering only oneself, the married couple must consider each other in all life decisions. When you look at marriage through realistic eyes rather than the fantasy setting a wedding is designed to create, marriage is a business, and the business structure is a partnership.
While single, you accumulate a ton of stuff, as does your future husband or wife. You bring that stuff into the marriage, and then begin accumulating marital property, including financial accounts, retirement plans, insurance coverage, and numerous additional things other than just the house and the car. Even if one spouse attains property during the marriage in his or her name only, Maine considers it marital property, unless:
- the property was a gift or an inheritance designated to one spouse only
- the property is in exchange for property owned by the spouse prior to the marriage
- the property was acquired after the married couple was deemed legally separated
- the property, and/or any increase in its value, is property the married couple legally designates as "non-marital property" prior to their union, which brings us to one benefit of a premarital agreement.
When you join in matrimony, you join your lives and properties. If you are in possession of property that you do not wish to become marital property, whether that is physical property or financial holdings, drafting a prenuptial agreement is in order.
Within the prenup, a listing of what is being brought into the marriage and what remains individual property is determined, and once both parties agree upon and execute the prenup, this property remains yours in the event of legal separation or divorce.
This also creates less hassle when the marriage remains solid until death do you part. When there is no question over who owns what, the boundaries remain clear, and arguments over money and possessions are minimal. One of the number one reasons relationships fail is because of finances, so setting up a pre-nup to draft out each partner's financial condition prior to the marriage, financial responsibility during the marriage, and financial obligations after the marriage keeps these arguments and the possible demise of your marriage over them at bay.
Protection for You and Your Spouse
Aside from setting agreeable boundaries within the union over property and responsibility, a prenuptial agreement adds a layer of protection over you and your spouse in the event something happens to either of you or your marriage does, sadly, end up in divorce. Yes, you will take protective measures during your marriage to ensure that your spouse is protected through life insurance, financial savings, estate planning and numerous other avenues, but a prenup allows you to afford your spouse provisions, legally, should something happen to you or the marriage. Some examples of how a prenup is protective rather than destructive include:
- The designation and management of debt, i.e. if you or your partner are bringing individual debt into the relationship that you do not want your future spouse to absorb, you can designate responsibility in the prenup.
- The designation and management of wealth, e.g. you are richer or poorer than your future spouse is. It might seem as if it's more important to designate your individual wealth if you are rich, but a premarital agreement protects the poorer of the two, as well, with clear delineation of what is being brought into the marriage and what will be brought out of the union should it fail.
- This is yours and/or future spouse's second marriage. Second marriages complicate finance and property issues even more, because there is generally more property and children involved. If this is your second marriage and your existing property belongs to the children from your first union, it's best to outline everything in a prenup to protect them.
Premarital agreements are complex, but they are also an excellent idea prior to marriage. If you have prenuptial agreement questions, including whether you and your betrothed should even enter into one, contact the Law Office of William T. Bly. They possess the knowledge of Maine family law and are ready to guide you through this important decision.