Everything You Should Know About Prenuptial Agreements

Among Baby Boomers, this P-word was basically a curse word. Millennials have a much different perspective. Prenups were divorce insurance policies for Baby Boomers. Prenups are foundation reinforcement for Millennials. Money fights cause most marital disagreements. Prenuptial agreements resolve money disputes in advance. Therefore, they make a marriage much stronger. That’s why more Millennials take advantage of these pacts, especially if they’ve been married before.

Additionally, insurance is a necessary evil. No one wants or expects to die early. But responsible owners buy life insurance anyway, so they’re prepared for the unexpected. Likewise, no one wants or expects to get divorced, but a prenuptial agreement helps them be prepared for the unexpected and unwanted. Furthermore, a life insurance policy is often a good financial investment. A prenuptial agreement is a good investment as well, as mentioned above.

Georgia, unlike most other states, hasn’t adopted the Uniform Premarital Agreements Act. Therefore, drafting and enforcement laws are still convoluted in the Peach State. Nevertheless, in as little as one office visit, a Marietta family law attorney can draft a solid prenuptial agreement. Later, if things go sideways, an attorney also gives spouses solid advice about their legal rights, as well as practical cost/benefit advice. Frequently in family law, a fight is possible, but for financial and/or emotional purposes, the battle isn’t worth fighting.

Drafting a Prenup

Financial and emotional issues, and specifically possible disputes in these areas, are front and center in most premarital agreements. Furthermore, the spouses can modify the premarital agreement as these financial and/or emotional needs change.

Property classification and division is usually the most time-consuming part of a divorce proceeding. These yours, mine, and ours disputes have also sent many solid marriages to the bottom of the sea.

Prenups address classification and division matters. Assume Wife, a recent graduate, owned a small, struggling dental practice when she married Husband. Husband kept the home fires burning so Wife could focus on her practice. Husband also used his considerable marketing skills to expand Wife’s practice. When the couple divorces, the solid dental office is worth a lot of money.

This simple, common example contains so many property classification and division issues we hardly know where to start. Husband might claim credit for the lucrative practice. He watched the kids while Wife worked late and expanded its patient base. Wife might claim credit as well. Experienced dentists have more patients and make more money than new graduates.

There’s a lot at stake. The judge’s ruling not only includes the dental practice itself, but also all future revenue and debt related to the practice.

A prenup draws clear boundaries and obviates these arguments. Both spouses know the rules during the marriage. If they divorce, they avoid a messy and costly fight that no one truly wants.

Prenups also address emotional issues. Let’s stay with the dental practice. Assume Wife was married before. She plans for her son from her first marriage to take control of the practice someday. But that plan might not sit well with any children she has with Husband.

Once again, prenups address these issues. A prenup, usually along with a will or trust, establishes clear lines of succession for family businesses.

Prenups also address other issues, such as spousal support. Generally, courts uphold any limit that’s not unconscionable (more on that below). Child support, child custody, and related issues are the only major off-limits items. These orders must be in the best interests of the children and not in the best interests of the parents.

The Signing Process

This next step is a tricky one that many lawyers skip, and do-it-yourself downloaded prenups don’t address at all. But getting this step right is usually the difference between an enforceable prenup and a piece of paper.

A spouse probably shouldn’t ask another spouse to sign a prenup six months before the wedding. Early signings give the impression, rightly or wrongly, that the spouse only cares about money. Late signings, like six hours before a wedding, are a bad idea as well.

That leaves lots of space in the middle, and there is no one-size-fits-all timing. Your Marietta family law attorney can give you good advice in this area, as well as advice about pitching the prenup to the other spouse. The aforementioned life insurance example usually works well.

On the flip side, if the other spouse breathes the P-word, you should immediately consult with a lawyer. Early legal representation gives you a chance to shape the provisions. Additionally, unless both spouses have independent Marietta family law attorneys throughout the process, enforcement could be a problem.

Breaking a Prenup

Since Georgia isn’t a UPAA state, enforcing a prenup in he Peach State is rathe complex. However, there’s a strong presumption in the law, especially in family law, that parties should work things out between themselves if possible. So, Georgia law includes four basic possibilities in this area:

• Extreme Duress: The law allows considerable pressure in these situations, up to, and including, a “sign or else” ultimatum. Rather, extreme duress is presenting a prenup right before the organist plays Here Comes the Bride or saying, “you’re not leaving this room unless you sign.”
• Fraud: Basically, fraud is a substantial misrepresentation of a current material fact which is calculated to produce financial gain. Concealing assets or debts is fraud. An empty promise to modify the agreement later isn’t fraud.
• Unconscionable: A 60-40 split is uneven. An 80-20 split is unfair. A 100-0 split is unconscionable. People agree to one-sided contracts for various reasons, both good and bad. So, Georgia law only protects these people in limited situations.
• Changed Circumstances: This final area is the one major difference between Georgia law and the UPAA. Changed circumstances overturn prenups in Georgia. This provision comes up frequently in business investments. Stock certificates could be almost worthless one year and extremely valuable the next year.

Most prenuptial agreements include severability clauses. If a judge invalidates one portion, the remainder is still legally enforceable.

Prenups make marriages stronger and divorces easier. For a free consultation with an experienced Marietta family law attorney, contact The Phillips Law Firm, LLC. Virtual, home, and jail visits are available.