It is no secret that almost half of all marriages end in divorce. The statistics are even grimmer for second (60-67%) or even third (74%) marriages. If you have been through a divorce before, you may know how time consuming and emotionally draining the process can be. Not to mention, how expensive it can be to go to court and pay for lawyers. Now that you are thinking about getting married again, you may want to consider entering into a prenuptial agreement (or “prenup”) that will allow you to have more control over what will happen in the event the marriage ends.
Financially based conversations are not always easy to have but it does not have to be as awkward as some people make it out to be. Because every couple’s financial situation differs, it is important to talk frankly about your current circumstances, and how they may change following your marriage.
If you or your future spouse have any of the following situations, you should discuss your financial expectations for the future:
- You Earn Significantly More than Your Partner– In most states, a prenup can be used to limit the amount of alimony that may be payable following a divorce. It should be noted, however, that prenuptial agreements are subject to judicial review, and if a judge considers your alimony arrangements to be punitive the court may overrule them.
- You Earn Significantly Less than Your Partner– Prenuptial agreements aren’t just about protecting the wealthy, they can also be used to protect the financially weaker partner, ensuring that they are properly compensated in the event of a divorce.
- Your Partner Has Significant Debts– If you are marrying someone with a high debt profile, you may be held responsible for those debts should your marriage end. A prenuptial agreement will protect you from assuming the liabilities of your spouse.
- You want to leave a large majority of your estate to your children.In Maryland, surviving spouses are entitled to at least one-third of your estate, if you have surviving children. If you want to leave your future spouse less than that amount, he or she will have to waive these estate rights in a prenuptial agreement.
- You want to keep your finances separate. It is common for couples, especially those previously divorced, to want to keep their finances separate. However, if you do not have a prenuptial agreement, even money kept separately can still be considered marital property and divided during a future divorce, if earned during the marriage.
- You still have obligations to support an ex-spouse or children.Unless you’re planning to pay your obligations with pre-marital savings or inherited funds, you’ll probably be using income that you’re earning during the marriage. Without a prenup, one-half of every dollar paid for spousal and child support is coming from what will be seen as your future spouse’s marital property. Perhaps he or she is fine with this going into the marriage, but these feelings could change if the marriage ends. A prenuptial agreement can help you address what consideration will (or won’t) be given for all the marital funds that were used to pay your pre-marital obligations.
- You plan to reside in a home that one spouse owned prior to the marriage.Is there a mortgage on this home? Will the owner’s income (i.e., marital property) be used to pay the mortgage or make improvements and increase the equity? You may want to address whether the non-owner spouse will receive a credit at the end of the marriage. You may also want to address when the non-owner spouse needs to vacate the home if one of you chooses to end the marriage.
- You plan to provide financial assistance to children from your prior marriage.I’ve seen this cause a lot of stress and resentment at the end of marriages. A prenuptial agreement can address how much each of you can give to adult children without needing the consent of the other spouse and make it clear when a discussion is necessary.
Prenuptial agreements provide an opportunity to have “that” conversation. A conversation about expectations, financial values, and the “what ifs” of life. If you hire the right attorneys to assist you in having a respectful conversation about these issues, it can be a fairly easy conversation to have and protect your future.
If you are getting married, or remarried, and would like to discuss how a prenuptial agreement would be beneficial for you, contact Jacobson Family Law at 443-741-1147 or Schedule an Appointment.