We discussed the changing perceptions of many marrying couples toward prenuptial agreements in a recent blog post (April 8), noting that these agreements (also commonly called premarital agreements) are being increasingly employed in first and, especially, subsequent marriages. Though the number of prenups is still relatively small, it is growing.
There are many reasons for that, say a number of family law experts, including Vivian Groman, a certified public accountant who works with many soon-to-be spouses.
Groman calls a couple's initial focus on a prenuptial agreement as "the start of an ongoing conversation about money, finances and ultimately the values that they hold that get expressed financially."
Groman says that, even if a couple decides ultimately not to execute a premarital agreement, the conversation leading up to that decision is valuable and can even by marriage-saving. "Everyone needs to have the conversation," she says.
Groman states that a prenup discussion makes especially strong sense in certain situations, which include the following:
- Uneven assets -- one party entering marriage with, say, a home and substantial account balances, with the other party having little or nothing
- Disparate debts -- e.g., failed business obligations or a sizable student loan
- Highly varied income -- one spouse is a surgeon, the other a lowly paid part-time workers
- Second marriage -- a prenup having great utility on issues regarding children from prior marriages
- Business ownership
Each area of focus obviously comes with its unique set of questions and considerations. For example, certain debts may fall upon a partner even if a prenup explicitly excludes them. Moreover, judges sometimes toss prenuptial agreements when they sense they violate policy norms by being overly unfair to one of the partners.
A family law attorney with extensive experience in prenuptial agreements is optimally positioned to discuss this planning tool with a newly marrying couple.
Related Resource: Los Angeles Times, "Six situations in which you may need a prenup" April 24, 2011