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Prenuptial Agreements: A Primer

Prenuptial agreements seem to be in the headlines recently. No longer the domain of celebrities and billionaires, “prenups” are becoming more popular for millennial and Generation Z couples and can serve a variety of purposes when couples decide to marry.

Below are answers to fairly common questions regarding these agreements.

What is a prenuptial agreement?

A prenuptial agreement, or “prenup,” is a contract potential spouses enter into before marriage that typically addresses property and financial matters between the couple during marriage and after. While child custody and child support are possible issues that may come up in a divorce, prenuptial agreements are not binding on those two issues in Georgia. Rather, the courts make the ultimate decisions regarding those issues. Nevertheless, a court may consider what spouses have provided for in their prenuptial agreement when determining custody and child support during divorce proceedings.

What does a prenup cover?

The agreement may address a wide range of financial issues, including property rights (such as assets, debts and real property) and alimony. When entering into a prenuptial agreement, the parties can agree to have their property rights determined by their agreement rather than the divorce court’s default rules, which vary by state. The agreement may define whose property is whose and how to divide any property that is accumulated during the marriage in the event of a divorce. Prenups also can include terms dictating alimony, including what amount, if any, would be appropriate  should the marriage end.

Why would a couple consider a prenup?

There are several reasons to enter into a prenuptial agreement. First, the prenup serves to protect both parties by defining the financial framework of the marriage beyond the existing common property laws of the states. Think of this point as such: Without a prenup, should the couple divorce, disbursement of their assets (and debt) would be based on the state’s laws, not as the couple directs.

Second, and perhaps more importantly, a prenup is an excellent pretext for couples to have the “money conversation” prior to getting married. Many couples put that discussion off, which can lead to unwelcome surprises and marital tensions down the road. A properly drafted prenup lays out both parties’ assets and debts and helps a couple to better understand their financial circumstances at the time of the marriage.

Who should consider entering into a prenup?

Many times, couples come to the marriage table with vastly different financial profiles. In such cases, a prenup can protect the assets one spouse earned prior to the marriage. If one partner owns a business, a strong prenup can help safeguard those assets and liabilities. It also can shield one partner from considerable debt of the other.

For couples marrying for a second or third time, the agreement can preserve assets from a previous marriage, as well as save time litigating financial issues should the new union also dissolve. As mentioned before, prenups further delineate asset and debt ownership if the state’s laws are nebulous. Look at these agreements as tools for couples to better control their individual and marital property.

What advice regarding prenups would you give young couples?

Give the prenup full consideration. Have the “money conversation” with your partner early, perhaps even before becoming engaged. Regardless of whether you ultimately enter into an agreement, clear communication over combining assets and debt – or not – is essential for a healthy marriage. Don’t wait until the last minute to discover an unpleasant surprise. Getting married is hard enough; why add money stresses to the mix?

Alexis Connors is an associate at Boyd Collar Nolen Tuggle & Roddenbery. She focuses on family law matters, including complex divorce litigation, child support and custody disputes, and paternity and legitimization.