We Don't Have Any Money. Should We Still Get a Prenup?

We Don't Have Any Money.…

Nobody gets married thinking they will get divorced, but – like it or not – the undeniable reality is that the statistics confirm that 50% of all marriages in the United States end in divorce. Furthermore, there is an informal consensus among the available research that the major source of conflict for married couples is money.

But, you see, a prenuptial agreement is not “about money” per se. It is about control. Specifically, it is about control over a part of life that often ends up being one of the worst parts of one’s life.

What’s important to know out of the gate is that everyone who is married has a prenuptial agreement. That’s right. If it is not the one you negotiated and bargained for prior to your marriage, it is one that will be imposed upon you in the form of laws that exist in the state with jurisdiction over your divorce. Therefore, if you wish to be in control of how your financial affairs will be handled in the unfortunate event of a divorce, then you should get a prenuptial agreement prior to getting married.

In a prenuptial agreement, you can negotiate for the disposition of property, division of retirement assets, allocation of debt, alimony, and many other financial and practical issues. You can be as creative as you would like. For example, you can include charts, you can agree to a set of terms that would apply if your marriage lasts up to 5 years, and you can agree to a different set of terms to apply if your marriage lasts over 10 years. You can agree that each one of you would be responsible for your respective debt acquired during the marriage. You can agree to share equally in any debt acquired during the marriage. The list goes on.

Sounds good? Well, to be fair, I also have to explain the not-so-glamourous side of the process. I tend to be blunt in my consultations because I like to be honest and direct with people. So, here goes, in the ascending order of discomfort:

(1) Your prenuptial agreement cannot deal with issues of custody and child support. The reason is that the parties cannot override the law on the issue of the children’s best interests and the child’s right to financial support from the parents, which can only be determined at the time of the divorce.

(2) Your prenuptial agreement cannot be unconscionable at the time it was executed. “Unconscionability” is a legal term that should be thoroughly explained to you. In a nutshell, it is a legal doctrine that describes contractual terms that are just so unjust that implementing or enforcing them would lead to a result that cannot be tolerated by equity. What does that have to do with contract law, you ask? Aren’t two parties capable of consent able to form any contract they want? As it almost always is in the law, the answer it “it depends.” In the context of a prenuptial agreement, it depends on the bargaining powers of each party. The doctrine is meant to protect people from overreaching by the other party.

(3) You and your prospective spouse will be required (yes, required) to completely disclose every detail of your financial circumstances at the time you are entering into the prenuptial agreement: your debts, your assets, your earned and unearned incomes, your income tax returns, and, yes, any trusts that exist for your benefit. You will be required to be transparent for your prenuptial agreement to be enforceable. This is because a knowing, voluntary waiver can only be enforceable if the assets waived were known to the person agreeing to a waiver.

Whether you have money and/or assets to protect in a prenuptial agreement right now or whether you anticipate the possibility of acquiring money and/or assets in the future (wouldn’t that be everyone?) you should speak with a family law attorney to understand how a prenuptial agreement may benefit you and your family. Feel free to call our office or contact us through our website to schedule a consultation to go over your specific circumstances, questions and concerns.

Margarita Romanova, Esq. is an Associate with Ruvolo Law Group. She joined the firm in February 2021. To schedule a consultation with Margarita, please call 973-993-9960 or submit your inquiry through our Contact Us page.