The pre-nuptial agreement (“pre-nup”) has long been used by the wealthy who were considering marriage to protect their wealth be it a family farm or business, or simply legacy wealth in the event of death or divorce. A similar agreement, the post-nuptial agreement (“post-nup”) can be used after the marriage to do the same things, or to modify a pre-nup. Recently the use of these marital agreements has become more widespread and the subjects they cover more varied.
Traditionally a pre-nup was used to resolve issues of support, division of property and distribution of wealth in the event of death or divorce. This brough everyone a degree of comfort, security and certainty. The expanded scope of the modern marital agreement may include terms obligating the use of income and the payment of expenses during the marriage, provisions for a spouse to leave a career and become a homemaker at some point, obligations to save for retirement and penalties for “transgressions” against the marital union. Marital agreement can be very useful contracts, even in the non-traditional sense.
Consider Jalen, a middle-aged veteran working as a nurse in a nursing home setting who has more life insurance death benefits than cash in the bank. Jalen has been diagnosed with Lou Gehrig’s disease, or ALS (amyotrophic lateral sclerosis). His doctors advise him that it will result in his death in a few years. Jalen knows the high level of personal and emotional support he’s going to need as the ALS progresses. He also knows his elderly parents can’t help with his care and he doesn’t want to end up in a nursing home. Jalen makes an agreement with another nurse. She agrees to personally care for Jalen in his home until his death in return for the benefits of marriage and to be named as the beneficiary of Jalen’s life insurance policies. Their attorneys draw up the martial agreement accordingly.
Also consider Mark and Mia, whose biological clock is almost done ticking. They’d like to marry and start a family right away but want to make certain that the children will receive adequate financial support and be raised in a specific manner in the event the stay married, get divorced, or die. They both agree that their children will receive sports and music training (instrument, dance or singing), controlled media and electronics exposure, no corporal punishment ever, and, if Mark and Mia divorce, they will each have 50/50 timesharing with the children. Their attorneys have advised them that some of these provisions may be considered merely “guidance” by a judge or may be thrown out completely; but that they are free to set the terms of their agreement to be whatever they wish. Mark and Mia complete the marital agreement process with their attorneys.
Pre-marital or post-marital agreements are being used more than ever and for more reasons than ever before. They can seem straightforward, yet be very tricky. This article just scratches the surface. Each person should hire his own attorney to help with the design and drafting of the agreement to limit misunderstandings and avoid technicalities, such as signing an ineffective agreement. Before you sign any marital agreements, always consult an attorney do discuss your particular situation and goals.
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