It is easy to equate the term “prenup” with an exaggerated, Hollywood-esque version of the stereotypical filthy rich man trying to shield his massive wealth from a poorer spouse. There’s no denying that this scenario has likely played out many times over the years, but prenups are about more than just protecting wealth, and they can prove useful for both parties.
We’ve discussed in a previous post some of the ways in which simply living in the fast-paced, high-tech world of Silicon Valley can be hazardous to the health of your marriage. Keeping up with the proverbial Joneses can wear down even the happiest of couples given enough time, and a split might be the result.
What can a prenuptial agreement do for me?
Broad prenups are widely popular among younger generations of “new wealth” like Millennials and GenX-ers who recently hit it big – or think they are about to – in the tech industry. These people know the value of their dollars, and proactively work to protect them. Normally California is a community property state, where money and property acquired during the marriage split evenly in the event of a divorce. A well-drafted prenup can set those rules aside, delineating set amounts (or percentages) that each spouse is to receive, removing the uncertainty normally associated with property division. This is particularly advantageous when property rights include a tech business, as the prenup can help keep that business asset separate from marital property.
Premarital contracts are wealth-protection devices, sure, but they might also in some cases be relationship savers. They can prevent fighting tooth and nail over every penny, stave off heated discussions about alimony, and assign ownership of real estate, stopping these from becoming huge points of contention during the divorce proceedings. Imagine if couples could actually walk away from the marriage without hating one another because things wrapped up neatly.
Are there limits?
There’s no doubt that prenups are helpful in many ways. The real question might actually be this: what can’t a prenup do? Perhaps most notably, a prenup cannot set out any terms for custody or support of children. Parties to a prenuptial agreement must be represented by their own attorneys and each must take a seven-day period of reflection before signing on the dotted line. There can’t be a last-second signing just before the wedding bells ring, as that could be seen as an indication that one party was under duress to agree.
The parties (and their legal counsel) also shouldn’t include irrelevant provisions in a prenup. In the past, some people have put in outlandish “lifestyle clauses” that dictate terms of partner intimacy, weight gain/personal appearance, hostess duties, conduct, and more. Such terms are likely to be unenforceable on their own merits, and they might invalidate the entire agreement.
If you are planning a trip down the aisle any time soon and you want to know how to protect your bottom line beforehand, a prenup might be right for you and your partner. Don’t try to “do it yourself,” though – a mistake can cause serious problems.