When it comes to the term “prenuptial agreement,” many people think it only applies to older, more established people that might be embarking on marriage later in life and want to protect their existing assets.
However, a prenuptial agreement in the District of Columbia and Virginia can be useful, and sometimes is necessary, to engaged couples of all ages experiencing different financial circumstances. Prenuptial agreements can provide for potential economic events in the future, regardless of how sophisticated your financial picture is currently. Younger engaged couples should consider prenuptial agreements as providing certainty in future circumstances that may not be realized at the time you marry.
If you do not create your own prenuptial agreement, your state/district’s divorce laws act as your agreement instead and delineate what is considered separate or marital property if you divorce. Jurisdictions like the District of Columbia and Virginia equitably divide property upon divorce and what is considered “equitable” may differ depending on the attorney you ask. Younger generations that have now survived the Great Recession and a pandemic might want to create more certainty for themselves going into marriage by defining the financial terms of their relationship rather than having it done by the district/state. Additionally, a prenuptial agreement gives you and your partner the opportunity to be open and honest about your finances prior to marriage so each of your expectations are clear before taking that big step.
Even if you think you don’t have enough property or valuable assets to protect in a prenuptial agreement now, prenuptial agreements can protect future assets or categories of property that don’t even exist yet. I encourage my clients to think of it like an insurance policy or safety net that protects you, should you ever need it, and it provides peace of mind.
In deciding whether a prenuptial agreement is appropriate for you, here are some topics to discuss with your future spouse:
- How to manage your earnings during the marriage– If this is not defined in an agreement, all of your income received during your marriage will otherwise be marital, regardless of where you deposit it.
- How to address future acquired real property– If one of you provides the down payment or money for renovations you may want to consider addressing how those funds will be treated in the future.
- How to address inheritance– While gifts and inheritances received during the marriage are considered separate property even without a prenuptial agreement, there are situations where an inheritance can become marital.
- How to address any current or future business interests – An ownership interest in a business, acquired before or during a marriage, is a complex asset that can be provided for in a prenuptial agreement.
By agreeing to the financial terms of your marriage at the outset, in the future this could save immeasurable time, frustration, and attorney’s fees if you can agree ahead of time how the asset will be divided when you each have clear heads. Younger people are approaching marriages with open minds and different ideas of what a marriage looks like. The topic of divorce and how you would want to conduct yourself during that process is less taboo and is a financially savvy thing to do for yourself at any stage of life. Prenuptial agreements provide peace of mind by giving spouses the certainty they need to focus on their relationship with their spouse, which is the most important piece of any marriage. If you’re interested in discussing whether a prenuptial agreement may be right for you and your future spouse, it is in your best interest to consult an experienced family law attorney who can help you think about what assets and future situations you can and should account for in your prenuptial agreement.
Cierra Vaughn is an Associate practicing in the District of Columbia and Northern Virginia.