A few weeks ago I received a call from one of my clients that his son had just become engaged. The question he had for me was whether his 30 year old son needed a pre-nuptial agreement. My client was in favor of having his son do a pre-nuptial agreement because his son owns a business. My client’s wife on the other hand is totally opposed to it. Her view is that since this is a first marriage, a pre-nuptial agreement is not appropriate. They asked my opinion and my advice was that he should execute a pre-nuptial agreement.
Many people are under the mistaken belief that pre-nuptial agreements are only for the very wealthy and second marriages; that is just not the case. In fact, more and more people are doing a pre-nuptial agreement for first marriages. It’s important to understand why people do pre-nuptial agreements. It’s not because they’re don’t truly love the other person or they think the marriage won’t last. The reason why more and more people are doing pre-nuptial agreements is because they recognize the reality and complications of life.
We have all seen statistics which show that over half of marriages end up in divorce. Unfortunately, that number is growing, not shrinking. Because of that more and more people are going to end up in a divorce situation. In that regard, we all know how messy divorces can be. In fact, it’s not unusual to hear about divorces that are in court longer than the marriage lasted. The purpose of a pre-nuptial agreement is to make sure that doesn’t happen. A pre-nuptial agreement is nothing more than an agreement between the parties setting forth what happens if the marriage does not work.
In this particular situation, the reason why I recommended the pre-nuptial agreement was because of the son’s business. As a business owner, there are a number of different issues one needs to consider in order to run a successful business. First is flexibility. If a business owner gets divorced, that business could be subject to the divorce proceedings and as a result, the business owner could lose all flexibility. Businesses that don’t have flexibility and are stagnant find that they are not in business for long. A pre-nuptial agreement can exclude the business from any of the divorce proceedings; thus, giving the owner the flexibility needed to run the business.
There’s another issue and that is all the time and effort it took to getting the business going. Every business owner that has started their own business will tell you that it is not easy and that there is a lot of blood, sweat and tears in starting their business. Therefore, why would anyone want to put that at risk in a divorce situation? A pre-nuptial agreement could prevent this.
As people get married later in life they tend to have more assets and complexities than they ever had before. A pre-nuptial agreement can make sure that if the marriage does not work out there is an orderly mechanism to dissolve the marriage and to let each party move on with their life.
For anyone getting married, they need to consider what would happen if the marriage does not work. For people who are getting married at a young age and do not have any substantial assets or unusual complexities, a pre-nuptial is probably not necessary. However, if someone is getting married later in life or has substantial assets, or is a business owner or has professional licenses, then a pre-nuptial agreement would probably be appropriate.
I recognize what a lot of people say is that you’re getting married out of love and that you shouldn’t think about what happens if the marriage does not work. That would be nice; however, we are adults and need to face the reality that even when two people truly love each other and get married, it doesn’t assure that the marriage will last. Therefore, all a pre-nuptial agreement does is make sure that in the event the marriage breaks up, both parties can go their separate ways without judges, courts and lawyers determining their fate.