A Second, Third, or … Marriage?
If you're marrying for a subsequent time, you may want to take specific steps to protect the assets you acquired during and after your previous marriage(s). If you come into this subsequent marriage with a lot of property, you'll want to talk to a lawyer about preparing a prenuptial, or before marriage, agreement. The purpose of a prenuptial agreement is to protect assets both for yourself and for your heirs — children you have from a previous marriage, for example.
A prenuptial agreement lists your property and your beloved's property. Depending on the jurisdiction, you can make a variety of agreements in a prenuptial. You can decide who will have custody of any children, how much support will be paid, and how any assets acquired during the marriage will be divided. It makes specific provisions for how this property will be divided in the event of death or divorce. For instance, you might agree that if the marriage lasts less than three years, each of you takes back all your property, one of you pays the other a cash settlement of so many dollars, and you both move on. If the marriage lasts longer, you agree that different terms apply.
Doing a Prenup the Right Way
If you decide to use a prenuptial agreement, you need to do it right. Prenuptial agreements are often challenged when the parties divorce, and courts end up throwing them out as unfair or signed under duress. In some states, a challenge can only be made if the parties are married fewer than a certain number of years. If your agreement throws your formerly beloved out in the cold with only the clothes on his back, the court may want to avoid such a harsh result. As with any agreements made between spouses, the court can decide to change the terms if it believes the circumstances support such a change. For example, if your prenuptial says that you own various stocks and that you alone will retain them in the case of a divorce. During your seven year marriage, you did nothing with the stocks but your spouse spent hours every day playing the stock market. As a result, your stocks have quadrupled in value. A judge could find that giving you title to all of the stocks would be unfair to your spouse. Your prenuptial agreement is now found to be unconscionable and your spouse is awarded a share of your stocks. The point here is that no matter how ironclad you think your agreement is, provisions can be changed.
Other Protective Measures
If you enter into a subsequent marriage without a prenuptial agreement, you may want to take other steps to protect assets you bring into the marriage. The problem here is that when folks think about marriage, they seldom think about protecting their property. Some couples find the notion of valuing your property before the marriage insulting and inconsistent with the foundation of the institution of marriage. For these folks, dividing property is like saying your marriage is doomed from the start. Don't be fooled by these emotions. All too many couples start their marriages this way and it's the spouse with assets who always pays the price if the marriage fails.
A prenuptial agreement is like insurance. Just because you buy life insurance it doesn't mean you think you're going to die tomorrow. The same is true of protecting your assets. If the marriage ends and you're the spouse with all the assets, you'll be thanking your lucky stars you took steps to protect yourself.
Prenuptial agreements need to be prepared carefully. It's ideal if both parties are represented by lawyers who review the document. Both parties should fully disclose all their assets, and the terms of the agreement should be fair. The agreement should be signed as far in advance of your wedding day as possible.
In the best of all possible plans, you would have your house and any other real estate valued the month of the wedding. You would make copies of bank statements and investment or retirement account values for that month. If you owned a business, you would have its value documented at that time as well.
People almost never do this; it seems so heartless and crass. When they divorce, they have no idea what their stuff was worth when they got married, and they can't compare those values with present-day values. Remember, if you want to establish a premarital interest in anything, you have the burden of proving it to a judge. Tracing nonmarital interests gets only more complicated as you bring more assets into a marriage. If you don't keep good records, you won't be able to show where your money or property went, and you won't be able to make a nonmarital claim.