The recent wedding of Facebook’s chief executive, Mark Zuckerburg, and his longtime girlfriend has sparked speculation about whether he and his wife signed a prenup before marrying. While this speculation stems from Zuckerburg’s extreme wealth, getting a prenup is an important consideration for many couples.
Prenups, often referred to under the law as premarital agreements, make it possible for soon-to-be spouses to agree as to how they will split their assets should they divorce someday. Couples can thus contract around what a state court would otherwise determine in terms of how they should divide their property.
There are some common situations when couples sign a prenup. They often do so if one spouse is significantly wealthier than the other. Or, both spouses might have substantial income and assets at the time of marriage. This is especially true today, when couples are waiting longer to get married and thus are more likely to have a high paying job, own a house, or have received an inheritance. If this is the case, a prenup is a good way to organize a complex assortment of property and to keep assets earned prior to the marriage separate. Signing a prenup also forces newlyweds to disclose their financial pictures and discuss them with each other, foreclosing possible surprises during marriage.
A prenup is also a good idea if one spouse enters the marriage with large amounts of debt, say from student loans, or if one or both spouses have children from a prior marriage.
Couples can use prenups as an estate planning tool, whereby they agree to waive what is called an “elective share.” When one spouse dies, the elective share is the portion of the deceased spouse’s property to which the surviving spouse is entitled. Sometimes spouses agree to waive their right to the elective share, for example if one spouse already has enough wealth or if the spouses plan to provide for each other through other means such as life insurance.
If you are planning a marriage, you should discuss the possibility of a prenup with your fiancé and an attorney. You should have these conversations early, as courts are suspicious of prenups signed within a couple of months before the marriage date. The attorneys at Petrelli Previtera Schimmel have experience preparing prenups for clients and are happy to answer any questions you may have.