Pre-Nuptial Agreements: Why To Consider One

The Wall Street Journal in an article written by Mary Pilon detailed some of the reasons couples enter into prenuptial agreements.

In the article, I was quoted for having noticed a trend in my practice. In conversations with many of my younger clients, I observed that often they did not want a pre-nuptial agreement to protect assets they had already acquired-often they had yet to acquire anything of value, but instead, to protect their prospective inheritance. In many cases they were being dictated to by their parents and told that they had to obtain a pre-nuptial agreement.

In its most basic form, a pre-nuptial agreements identifies what is marital property, which would be subject to equitable distribution if the parties later divorce, and what is separate property, which would be immune from their spouse’s claims.

Property inherited or acquired by gift is separate property. However, money is fungible and memories of the source of the funds are conveniently fleeting.

As pointed out in the Divorce Analysis Blog:

A prenuptial agreement is useful in establishing the parties individual pre-marital wealth levels. While this may seem mundane ( I mean, who doesn’t know their net worth when they say “I do”?), you would be how surprised how time colors the memory of wealth. Like the old “fishing story” beliefs about net worth can change dramatically with time.

One of the most useful aspects of the prenuptial agreement is that it clearly defines what is separate property, where appropriate, values the separate property and delineates the circumstances where separate property can be converted to marital property.

Parents leaving sizeable estates to their children may require the children to obtain pre-nups to ensure that however their children use their estates, the funds will for all purposes remain a separate asset and otherwise immune from a spouse’s claim in the event the marriage ends in divorce.

33 Responses

  1. I am the editor of <a href="" rel="nofollow"></a> and I frequently will search the Internet for quality information pertaining to legal self-help. The information presented in this article about the value of a pre-nup in the case of protecting prospective inheritance is very useful, so I have included a teaser on Free Legal Aid with a link back to your blog in the hopes that it will help spread the usefulness of your post! Thanks!
  2. I read this article and loved it. The section on couples having prenups because their parents want them to protect an inheritance is certainly very accurate. I have noticed the same trend in my practice. Two of the last three prenups I did were done for exactly that reason, and in one case the child very much did not want a prenup....but her family insisted.
  3. I think, given the 50% divorce rate, parents just want to ensure that their estates do not end up in the the hands of their ex son or daughters in-laws.
  4. Thank you.
  5. Rich
    Does anyone know as a British citizen, is there weight in protecting inheritiance on a pre-nup agreement in Thailand? I found this article regarding the prenuptial agreement in Thailand . Which discussed how there may be a knock on effect of recent International events, but is the agreement rock solid in Thailand?
  6. Rich
    It's an interesting world we live in today. Whilst the tradition of marriage remains a societal institution it's relevance in other ways is certainly changing. As a British male in my early 30s, marriage is not something I think about everyday, but it is at the back of my mind and still there. Recently whilst browsing the web I came across this article on the prenuptial agreement in Thailand which highlighted a number of interesting issues. Firstly that a international prenuptial agreements appear to be having more validity the world over, in reference to the high profile German case. Also interestingly was that instead of the main income earner being awarded ownership of surplus in assets (after the financial needs of their previous spouse had been met), there was a shift to equal sharing. Marriage continues to evolutionise. Now I am thinking do I ‘need’ a pre-nuptial agreement, or is it likely my wife to be will want one even if I don’t!
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