In the midst of wedding season, Jessica Woll, managing partner of Woll & Woll PC, a divorce and family law practice in Southfield, notes the pros and cons of signing a pre-nuptial agreement should be considered along with the guest list and flower arrangements.
A pre-nuptial agreement is a contract between two people that becomes valid upon the marriage of the couple and can include anything they want so long as the terms of the contract are legal. For example, some couples include mandatory couples’ counseling, financial penalty provision in the event the marriage ends due to one’s infidelity or sunset clauses that invalidate the agreement in part or in total if the marriage lasts beyond a certain period of time.
To determine if a pre-nup is right for a couple, Woll first explores the pros of the contract. The first pro to pre-nuptial agreements begins with finances. In order for a pre-nuptial agreement to be valid, each individual must disclose all of their assets and liabilities. According to Woll, requiring both spouses to come clean about their finances is a good idea before walking down the aisle. Also, if you have a child(ren) from a previous relationship, the child’s rights to a portion of an individual’s estate, as well as the child’s inheritance, can be protected through a pre-nup. Typically, a pre-nuptial agreement that protects children is done in conjunction with trust and estate planning, according to Woll.
Another pro to pre-nuptial agreements are divorce horror stories.
“A pre-nup has the potential to take away the fear of a bad breakup by allowing couples to decide in advance how they would be most comfortable dividing up the assets if the marriage does not work out,” said Woll. “Some believe that taking the mystery out of a potential divorce will enable the couple to focus on the marriage rather than a potential breakup.”
In addition, a pre-nup can protect the assets an individual accumulates prior to the marriage, as well as deal with how to handle certain assets that are obtained during the marriage. According to Woll, individuals who are older or have been married before may feel they need the security of a prenuptial agreement before trying marriage again.
The last pro to pre-nups offered by Woll, is in the event of divorce, a well drafted pre-nuptial agreement can save the couple a great deal of money if the division of assets and debts is well defined by the agreement.
However, there are cons to pre-nuptial agreements according to Woll. The first con begins with romance. Pre-nuptial agreements can take the romance out of the engagement and if only one spouse wants the agreement, it could lead to a bit of premarital discord.
“Over the years, I have worked for several brides and grooms that found the business of a marriage contract so distasteful that they called the wedding off as a result of their fiancee's insistence that they sign a pre-nup,” said Woll. “Some engaged people are of the attitude, if you are going to marry me, you should trust me without a pre-wedding contract.”
Even if a couple enters into a pre-nuptial agreement, the court may not enforce the contract in the event of divorce. According to Woll, in order to successfully challenge the validity of a pre-nuptial agreement, the challenger must demonstrate the agreement was obtained through fraud, duress or mistake, or misrepresentation or non-disclosure of material facts; the agreement was unconscionable; or so much has changed in the parties’ lives since the agreement was entered into that it would be unreasonable to enforce its terms.
Lastly, a pre-nuptial agreement, if challenged during a divorce action, can prove expensive, which may defeat the reason the couple obtained a pre-nup in the first place.
“If you have children from a prior relationship, I think a pre-nuptial agreement may be a good idea to protect your children,” said Woll. “Similarly, if you are involved in a family business, you may want to protect your extended family by entering into a pre-nuptial agreement. With the exception of these two examples, I believe the decision is quite personal and depends upon each couple’s individual circumstances.”
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