Premarital agreements are not commonly considered romantic. They get an especially negative treatment in the media - anyone who broaches the topic in a movie or TV show has nefarious intentions. We are looking to restore the reputation of premarital agreements (just in time for Valentine’s Day) because we believe there are plenty of romantic and practical reasons to consider whether such an agreement makes sense for your future.
Similar to the discussion in our last blog post, default state laws control the division and disposition of a married person’s assets when the marriage ends. The rules are different depending upon whether the marriage ended in divorce or death. One often-overlooked aspect of marital planning is the latter; that is, what is your spouse entitled to inherit when you die? This question often comes up in the context of second marriages. Each spouse may enter the marriage with assets acquired long before the contemplated marriage and continue to earn and grow assets during the marriage. When one or both parties have children, they often wish to pass part or all of those resources to their own children. People entering into marriage under these circumstances might not realize that spouses have a right to inherit some of those assets, depending upon various factors including the source of the assets, the respective assets of each party, and the length of marriage. Setting expectations about inheritance early can be a profound act of love, both for a spouse and children. When surprises emerge after one spouse’s death, it frequently leads to estrangement, hurt feelings, and, unfortunately, litigation which depletes the estate and postpones the grieving process.
This is true outside the context of blended families, as well. Money is cited again and again as a leading source of marital conflict in articles on the topic; and people have all kinds of reasons for raising the possibility of a premarital agreement. Clients often seek advice about protecting inherited assets for the ultimate benefit of their future children, minimizing taxes, or changing state law presumptions to meet their specific situation.
So often, the perception is that the purpose of premarital agreements is to “plan for divorce,” and agreements often include provisions requiring (or limiting) alimony and setting property division terms. But is this really so unromantic? An honest conversation with your future spouse about these topics is actually a good idea. Good relationships are born and sustained by good communication. Asking the question if a premarital agreement is right for your relationship is a way to clear the air about your concerns for the future. Perhaps a high-earning spouse with equally high student loans fears adding alimony to her list of obligations. Or, a spouse who leaves a career to move and be with the other spouse, fears losing earning capacity without adequate security. These documents are highly flexible and can be tailored to have a very narrow focus or a quite expansive one to fit each couple’s situation and relieve anxiety about the future.
Finally, you might consider making a premarital agreement to be an act of love for the moment when you’re least likely to feel it. Marital conflict, separation, and divorce are some of the most traumatizing events a person can experience. Agreeing in advance about how to settle your financial affairs if things go wrong can create certainty during conflict so that you and your spouse can focus on the cause of that conflict and potentially resolve it without letting financial fear take the wheel. It can even send the message, “I love you so much that I want to make it easier for both of us if we are someday going through the pain of breaking up.”
So, here is our Happy Valentine’s Day to you with a twist: Cupid’s love arrow may fly straight and strong, and when it sticks, it sinks even deeper if you can talk about money and security with love and care for one another. To learn more about default state laws and analyze whether a premarital agreement is right for you and your intended, contact Schooley Law Firm.