For richer or for poorer
Do you need a prenup?
One byproduct of an improving economy—with its increased salaries and property values—is that, according to the American Academy of Matrimonial Lawyers, prenuptial agreements are on the rise. With 60 percent of marriages ending in divorce, perhaps it makes sense to plan for such an outcome and protect your assets.
But it’s also probably a great way to suck the romance out of wedding planning.
“Not a lot of people sign them because it’s not romantic,” says Reno attorney Garrett Sutton.
Not only that, he says, but in a state like Nevada, which is one of nine community property states, they’re usually unnecessary.
Community property law says that most property acquired during a marriage is shared equally by both spouses and divided upon divorce, annulment or death. It’s presumed by law in the absence of any evidence to the contrary.
“In the case of a divorce, Nevada also recognizes property brought into the marriage separately by each party, so if it can be clearly identified as separate, it still belongs to the previous owner, even without a prenup,” says Sutton. “So in a state like Nevada, a prenup isn’t usually necessary.”
In fact, he says that if assets on both sides of the marriage aren’t significant, it probably isn’t necessary anyway. It could apply, however, if one party is bringing a huge amount of separate property into the marriage. Under community property law, if both spouses work on it, it can eventually become community property. A prenup could ensure the property remains individually owned, both during and after marriage.
Should you decide to pursue a prenup, Sutton cautions that you talk about it many months before marrying—not days. (Put those sitcom-style, minutes-before-the-ceremony scenes right out of your head.)
“There has to be adequate time to review and sign it, and each party must have a separate attorney,” Sutton says, insisting that those attorneys should also not be from the same firm, to guard against conflicts of interest. “If one party has an attorney and the other doesn’t, the courts can rule that it’s unenforceable.”
The same goes for prenups that in any way show preference to one party; such an agreement would be considered unconscionable and would likely be disregarded, which is why it’s so important to have separate attorneys protecting each person’s interests.
There must be full financial disclosure in any premarital agreement; each party must provide a comprehensive list of income sources, assets and debts. Though Nevada statutes on premarital agreements (NRS: Chapter 123A) are fairly brief, they say agreements that aren’t voluntarily entered into by both parties or did not involve fair, reasonable and accurate disclosure of property will not be enforced. Any provisions that limit or eliminate alimony and thereby force one party to be eligible for public assistance may be disregarded, and alimony could still be awarded. Finally, Sutton points out that prenups cannot make provisions about child support; such provisions would usually be unenforceable.
Something to consider at the outset of marriage is this statistic, drawn from research by the National Center for Family and Marriage Research: Married couples who do not pool their incomes are 145 percent more likely to divorce than those who do. So the principal of “share and share alike” may be worth considering.
Despite the fact that discussions about prenups aren’t easy to have, and may not even be necessary, experts do seem to agree that early financial discussions before marriage are valuable. Among the top reasons for divorce are lack of preparation for marriage and unrealistic expectations. A good sit-down to decide how you will handle your household finances could help head off some conflict down the road.
Though Sutton does not specialize in premarital agreements, plenty of area attorneys do. If you're considering one, an online search for “prenup attorney Reno” should lead you to plenty of practitioners who can help you.