People tend to associate Pre-Nuptial Agreements (or “Pre-Nups”) with the rich and famous, when, in fact, it is a useful tool for many of us. If you are planning to get married after having established yourself financially, you should think about protecting yourself and your assets. One way to protect the assets you are bringing into a marriage is with a written contract, otherwise known as a Pre-Nup.
A Pre-Nup generally addresses property and support rights should a marriage end in a divorce or the death of a spouse. While these are heavy issues to consider, a Pre-Nup does not have to cast a shadow over the excitement of the engagement or wedding planning. Contrary to popular belief, a Pre-Nup is not meant to encourage divorce. Rather, it helps couples take the guesswork out of many financial decisions during the marriage. And, negotiating a Pre-Nup does not have to be a contentious process. Done properly, a Pre-Nup involves fair negotiations, appropriate financial disclosure, and each side having their own independent counsel.
Below are just some examples of the circumstances when a Pre-Nup can be helpful. These issues may apply to couples of all ages and income brackets.
You may need a Pre-Nup if….one spouse plans to stop working during the marriage to raise children. A spouse who stops working to care for the children or the home is not automatically guaranteed a specific amount or duration of alimony under Maryland law. The Courts have discretion in awarding alimony, and one’s non-monetary contributions to the marriage (e.g. caring for children and the home) is only one of the many factors it can consider. A Pre-Nup can resolve this issue ahead of time. With a Pre-Nup that addresses this circumstance, a spouse may feel more comfortable stepping out of the workforce to raise children and risking the impact it could have on future earning potential.
You may need a Pre-Nup if…. one spouse is coming into the marriage with significant assets, perhaps a home, a business, or a sizable retirement account. Maryland law generally provides that, absent an agreement, what you bring into the marriage is classified as non-marital property, and what you acquire after the date of marriage, until the date of divorce, is classified as marital property. Those classifications are used to allocate assets at the time of divorce. But, if a non-marital asset increases in value during the marriage, due to effort or money contributed by either you or your spouse, then a portion of your non-marital asset can become classified as marital property. A Pre-Nup can protect your non-marital assets from becoming classified as partial marital property, even if the asset does increase in value during the marriage.
You may need a Pre-Nup if….you or your spouse expect to receive an inheritance during the marriage. Generally, Maryland law provides that an inheritance received by one spouse during the marriage is that spouse’s non-marital property. However, if you want to spend your inheritance on your spouse or children without having to worry about the funds becoming commingled with marital money or assets, then a Pre-Nup can be very helpful.
You may need a Pre-Nup if….you have “been there, done that.” Anyone having gone through a divorce before, especially one that was litigated, may want to avoid another contentious experience.. Knowing how property and financial rights will be handled if the marriage ends may provide some comfort before saying “I do” the second time around.
These are just some of the many reasons why you may want to consider a Pre-Nup before getting married. Do not wait until the week before the wedding! Committing your intentions to writing early in the engagement can make the process much smoother.
After reading this, you may have come to realize that a Pre-Nup is right for your situation. Although the cost of a Pre-Nup is dependent on each individual’s situation, a Pre-Nup is a good financial investment given all that is at stake in a marriage and our experience in drafting them makes us uniquely qualified to prepare one for you at a reasonable cost. If you feel that one is right for you, please do not let your concern about the cost keep you from contacting us. If you have any further questions about Pre-Nuptial Agreements or other family law issues, please contact Ferrier Stillman.
This information has been prepared by Tydings for informational purposes only and does not constitute legal advice.