A recent study by the American Academy of Matrimonial Lawyers revealed that divorce attorneys have noticed a significant uptick in prenuptial agreements in recent years.
Once thought to be only a problem of the rich and famous, prenuptial and postnuptial agreements are more common than ever. Such agreements should not only be more popular, but a prerequisite for business owners that plan to tie the knot.
Prenuptial Agreements Can Benefit Both Parties
We get it. No one wants to contemplate the “what ifs” as they embark on the journey of marriage. But we also know that life is unpredictable. No one likes contemplating death, but we all know that life insurance is important. Rather than viewing a prenuptial agreement as preparing to fail, it is better to look at the possible consequences of failing to prepare.
For business owners, having a prenuptial agreement can mean the difference between a business continuing to thrive and a business prematurely shutting its doors.
Prenuptial Agreements: Good For Your Business And Your Home Life
A prenuptial agreement should be part of a comprehensive plan that includes estate planning components such as a power of attorney, health care directive, and a will. This allows couples to have an open, honest discussion about their personal and financial wellbeing.
Another benefit of protecting your business operations via prenuptial agreement is that it can create a wall between your home and work life that benefits your personal and business interests. When you make decisions about your business, you can do so as a business owner; likewise, you can make decisions at home as a spouse and partner.
Prenuptial Agreements Are Not Ironclad
No contract is bullet proof. This is especially true of premarital agreements because of the intimate nature of the relationship between the parties creating them. Michigan law creates a fine tension between the right of parties to contract freely and a divorce court’s equitable powers. Thus, prenuptial agreements must be drafted carefully to avoid a court later refusing to enforce it. Seeking the advice of an experienced attorney well in advance of the wedding date is important.
If you’re unsure about whether you need a prenuptial agreement, consider the following circumstances that increase the need:
- One partner enters the marriage with significantly more assets. One partner is entering the marriage with significant debt
- Both partners have drastically different incomes or earning potential
- One or both partners have received or expect to receive a sizeable inheritance
- A party wants to control the amount of spousal support that will be paid (or avoid it altogether) instead of leaving it to the discretion of the cour