Over the past year and a half, he COVID-19 pandemic has shifted countless livelihoods. It caused immense strains on individuals and families trying to navigate the new normal. From health and safety concerns to economic stressors, it has certainly been a hard time for many.
On the other hand, some were able to find a silver lining. Families were able to spend more time together, and couples found time to strengthen their relationships. For many couples, this meant their relationship progressed faster than it would have otherwise. The rate of engagements jumped quite a bit in 2020.
This leads us to one more positive thing that came from the pandemic: With couples needing to wait a while until they can host the wedding of their dreams, extended engagements have become a new standard. A more prolonged engagement means couples have more time to discuss finances and prenuptial agreements.
Financial Planning With Prenuptial Agreements
When couples do not spend enough time discussing their financial future before getting married, it often leads to future disagreements. This is especially true if a couple has different financial goals and expectations.
Deciding to sign a prenuptial agreement together gives couples a great opportunity to discuss everything related to finances. This may include how they will handle joint financial decisions, financial expectations individually and together, and how the couple will manage finances both during the marriage and in the case of divorce or the death of one partner.
A prenuptial agreement can save many headaches down the road by allowing partners to agree to a premeditated framework of how finances will be handled based on their unique situation. This can help a couple avoid dealing with disagreements down the line when things will be handled by the statutory framework created by the state legislature.
What To Include in a Prenuptial Agreement
When creating a prenuptial agreement, there are several things couples may want to discuss. In the end, what will be included depends on the specific needs of the parties. Listed below are items commonly included in a prenuptial agreement.
- Protecting generational wealth
- Recognizing each person’s assets before marriage
- Business ownership and business management during marriage
- What will happen regarding these issues in the case of divorce or death
A prenuptial agreement will also classify a couple’s assets, letting them determine non-marital versus marital status. It also allows them to decide what will happen if the values of these assets increase. Along the same lines, the couple can choose how to treat different income streams during marriage and how to classify income from non-marital sources.
Why A Prenuptial Agreement is Important
“If a couple chooses to forego a prenuptial agreement, courts have a lot of discretion in how assets are distributed in divorce proceedings,” says Attorney Matthew Dolan of Dolan Divorce Lawyers, PLLC. “Property one party assumed would be treated as non-marital may be treated as marital instead.”
Prenuptial agreements allow partners to determine expectations — including spousal support — if the marriage ends in dissolution. Spousal support can be very contested and tends to prolong litigation, increasing attorney fees. Agreeing on financial expectations early on will also protect a party’s non-marital assets, which a court could otherwise consider when awarding spousal support.
All in all, discussions before marriage may require addressing some difficult topics, like financial planning and what will happen in the case of dissolution. With longer engagements, couples are finding more time to talk about these issues and come to essential agreements about these matters.