Winding Down Your Marriage: Basics of Prenuptial Agreements

By: Janice Dantes

 

Imagine yourself 20 years now. You are at the top of your company in your dream job. You have 3 beautiful children attending private school and bound for some of the best colleges in the country. You have a beautiful wife who stays home with the children. You have a beautiful house in the suburbs. You have been saving for retirement and built up quite a nice nest egg. Just when you thought you made it, your wife comes in and tells you, “I want a divorce.” She was your high school sweetheart. You did not have anything when you first met and therefore, passed on the prenup. Are you ready to give her half of everything?

When I started my business, I was encouraged by business experts to create a business plan and several contingency plans to address issues such as succession planning and winding down. With marriages, it is almost taboo to talk about what happens if things do not work out. Why do we encourage this with business but not with marriage, probably one of the most important partnerships in life?

Next to infidelity, the number 2 factor causing divorces are financial issues. I think too few couples discuss financial issues prior to marriage. For those married couples, have you discussed these topics:

• Were you aware of all your spouse’s assets and liabilities (including prior bankruptcies, the amount of dpebt they are bringing to the marriage, and the value of their retirement accounts)?

• If you use your savings that you built up prior to the marriage to purchase a home together, did you know that you are not automatically entitled to reimbursement of your savings if your marriage does not work out?

• If your spouse gives up his/her career to stay home to raise the children and no longer can return to the workforce if the marriage does not work out, are you willing to pay alimony or give them half of your pension/ 401K?

• If your spouse becomes permanently disabled and you have exhausted your marital funds, would you use your inheritance from your parents to care for him/her?

These are just some of the questions I ask when I work with couples interested in prenuptial agreements. Many of my clients have told me that they found the exercise of creating a prenuptial agreement useful because they discussed many financial issues they had not previously talked about.

I encourage everyone considering getting married, especially if this is a second marriage, to create a prenuptial agreement. If you are considering a prenuptial agreement, below are my top three tips:

1. Give yourselves ample time to create a prenuptial agreement. Planning for a wedding is busy. If you are contemplating a prenuptial agreement, be sure you contact a lawyer immediately and plan to sign the agreement at least 90 days prior to your marriage. The closer to your marriage date you sign the prenuptial agreement, the greater the likelihood the prenuptial agreement can be challenged in court.

2. Each spouse should retain their own attorney. Many couples think they can save money by hiring just one attorney to represent both of them. This creates a conflict of interest for the attorney. I encourage you to make sure you hire your own attorney to represent your own interests. If you are going to sign a prenuptial agreement without an attorney, you sign at your own risk.

3. Do not lie. This is the time to come clean. Please make sure you tell your future spouse about any financial issues you had in the past, any children from other relationships, and all your prior marriages. If you do not disclose this information, you risk having the prenuptial agreement challenged in court.

Thank you for reading. Until we meet again, love one another.

Janice Dantes is an attorney focused on serving Chicago’s Filipino community. Her area of focus is family law. She was born at Clark Air Force Base in Angeles City and came to the United States when she was 3 years old. Janice is a graduate of the University of Chicago and DePaul University College of Law. Her office is in downtown Chicago. If you would like to speak to her in English or Tagalog with your legal problem, please call (312) 546-5077 to schedule your free consultation.