Five Misconceptions About Prenuptial Agreements
A prenuptial agreement, also known as a prenup, is a written contract entered into between individuals planning to marry or enter into a civil union. A prenuptial agreement allows a couple the ability to determine their rights as to property and assets in the event a marriage ends in divorce. All states in the USA permit the use of prenuptial agreements. With this in mind, there are five fairly widespread misconceptions about prenuptial agreements.A Prenup is Not Necessary Because a Couple Intends to Maintain Separate Accounts
With alarming regularity, a couple planning to marry makes the decision not to enter into a prenuptial agreement because they've a "plan" to maintain separate financial accounts. The theory is that "my money is my money" and "his/her money is his/her money."
The legal reality is that maintaining separate accounts during the course of a marriage will not prevent a spouse from making a claim on the other's accounts should a divorce occur. Laws governing marital property does not allow for a "shield" to be created by the maintenance of separate accounts. Rather, the proper strategy to provide an agreed plan of asset distribution upon divorce is the creation of a prenuptial agreement.Prenuptial Agreements are Expensive to Have Created
Another persistent myth surrounding prenuptial agreements is that they are expensive to have prepared by an attorney. Before diving deeper into the costs associated with having a prenup drafted, reference must be made to the importance of retaining a lawyer for this important task.
There are instances in which couples attempt to draft their own prenuptial agreement. In other situations, a couple intending to marry may download a form prenup from the internet. The reality is that these are risky ways of trying to obtain a legally binding prenuptial agreement. In the grand scheme of things, a couple might save a relatively small amount of money by trying to draft a prenup on their own or downloading such an agreement. However, odds are strong that a prenup obtained in this manner may prove to be legally insufficient. If that occurs, the costs to a couple can be immense.
The reality is that an experienced attorney is able to draft legally binding prenuptial agreement for an affordable price. Depending on the law firm, an attorney might charge a flat fee for such an agreement. Alternatively, counsel might bill by the hour (but drafting this type of agreement typically is not an overly time-consuming process).A Prenuptial Agreement will not be Upheld in Court
Yet another prenuptial agreement myth is that such a contract is not likely to be upheld in court. The fact is that, provided a prenup is properly drafted and some essential requirements are satisfied, such an agreement is nearly always upheld in court. The one broad exception includes those situations in which a prenup was not professional drafted in the first instance.
In addition to being properly drafted, a prenup will be upheld in court if the parties enter into it freely and voluntarily and they understand what they are signing. In addition, a full, fair disclosure of assets must be made by both parties. Finally, each party to the agreement should have an independent attorney review the prenup before signing.Prenups are Only for Wealthy People
Another relatively pervasive fallacy is the prenuptial agreements are only for wealthy people. Considering the relatively high divorce rate in this day and age, the reality is that a wide swathe of people can benefit from entering into this type of contract before marriage.A Prenup Will Cause Relationship Problems
Some people contend that suggesting a prenup before marriage will cause relationship problems. Relationship problems can largely be avoided if a party raising the subject of a prenup does so in a calm manner and encourages open communication about the issue. Moreover, a bit of consternation about entering into a prenup before marriage is far better than the proverbial "war" that can occur over finances if a divorce (without a prenuptial agreement) should ever occur.
An experienced lawyer will arrange an initial consultation to discuss what you can expect during the prenup preparation process. Legal counsel will also be able to answer any additional questions that you might have about the pros and cons of a prenuptial agreement. If you have any questions concerning a prenuptial agreement, contact the Law Offices of Peter Van Aulen at 201-845-700 for a free consultation.