A prenuptial agreement is a legally binding contract that a couple enters into before getting married (or in the case of a postnuptial agreement – after getting married). Changes in social and economic dynamics have made prenups much more commonplace as people appreciate the benefits a prenup provides. Perhaps most importantly, creating a prenuptial agreement forces couples to have crucial and important conversations about the union they are entering into together, and necessitates conversations about the collective and individual goals they have for themselves and their new family unit being created through marriage. These crucial conversations help lay the foundation for a successful partnership

• A sign of the times! Many couples today view marriage as a partnership, making discussions about financial matters and the roles couples envision taking within their marriage responsible discussions to have before entering into marriage. Many people are aware that entering into a marriage means ‘something’, but the legal nuances of getting married in a community property state (like Washington) are important to understand!

• Modern Families.  Second (or third!) marriages and blended families also mean more complex financial situations. A prenup can be used to protect the financial interests of children from previous relationships and can also work in conjunction with a couple’s comprehensive estate planning goals. As people from different states or countries marry, prenups help couples navigate and simplify complexities that can accompany international marriages or couples marrying from different states (for example, a resident of a non-community property state marrying a resident of a community property state).
• Protection.  Couples getting married later in life may have already accumulated some assets, property, and debt. Prenups can help safeguard individual assets and clarify separate debt obligations. Prenup can be used to protect family wealth or heirlooms.
• Business Interests. If one or both individuals own a business, invest in businesses, or have plans to start a business, a prenup can help prevent potential disputes and disruptions to business operations in the event of a divorce or separation.
• Providing Clarify and Reducing Conflict. The process of discussing and drafting a prenup forces couples to have important conversations about financial goals, expectations and responsibilities while allowing couples to address potential points of conflict up front. This exercise helps strengthen the foundation of a healthy marriage and also lays the groundwork for a more amicable and less costly separation in the event of a divorce

It is true that not all couples may need a prenup, although the process of discussing mutual and individual goals, desires, expectations and anticipated roles within the upcoming marriage provide crucial foundations for a successful marriage. It’s highly recommended that both parties consult with legal counsel to discuss all the (legal) nuances that come with entering into marriage!

 

Authored by Denise L. Hansen, a Partner at Lyda Law Firm where she helps couples navigate the landscape of pre and postnuptial agreements, estate planning, co-ownership agreements and divorce. Call or email for a free consultation.