Congratulations on Your Engagement! Do You Need a Prenup?
Every celebrity divorce includes media discussions about prenuptial agreements (prenups,) but you rarely hear one of the celebrities discussing the details of the agreement. Jessica Simpson and Nick Lachey were wildly popular when they married in 2002 and their fame climbed as they starred in a reality show about their married life. At the time of the marriage, Lachey had seen more commercial success than Simpson, and they married without a preunp. During the marriage, however, Simpson scored endorsement deals and launched her clothing company, now worth a reported $1 billion. When the couple divorced in 2006, Simpson didn’t have to divide her assets in half, but she did later report that her marriage was her “biggest money mistake,” implying that she did have to pay more than she wanted to her ex-husband. When she married again in 2014, she reportedly did so with a prenup in place.
Of course, not every couple has the assets of famous singers and television stars, but smart couples will still want to protect their earnings and belongings. A prenup is a contract signed by a couple prior to the wedding that can override both community property law and equitable distribution state law.
A marriage is a contract, and taking the time before a wedding to clearly determine what belongs to whom, and what expectations are in place if a divorce should occur is smart business. Prenups can be used to detail what property each party brings into the marriage and how property will be divided, if necessary. If there are certain items that you want to ensure remain in your possession like family heirlooms, a prenup can accomplish that.
Prenups are sometimes a good way to care for children from previous relationships, making clear that they receive money in the event of the biological parent’s death.
While prenups can save a lot of headaches during a divorce, they can’t do everything. For example, a prenup cannot be used to determine the issues of child custody or child support. It is also difficult to stipulate personal behavior in a prenup, such as how children should be raised, how chores should be divided, or that a spouse must remain faithful.
Both people should have their own attorneys review the document prior to signing and it’s best to sign the document far in advance of the wedding date to avoid a later claim of coercion.