The holiday season is a time of joy, celebration, and for many, the anticipation of receiving a Christmas bonus. However, if you are getting engaged or already are, you may be considering a prenup and wondering if you can include that Christmas bonus in the agreement. The answer is unequivocally, yes! Getting a prenup is a great way to safeguard your hard-earned bonuses and assets. In this article, we’ll explore how a prenup can help protect your Christmas bonus and provide peace of mind during the most wonderful time of the year.
Understanding Prenuptial Agreements
A prenuptial agreement, commonly known as a prenup, is a contract entered into by a couple before they get married. If they don’t get married, it’s not a valid contract. Each state also lays out its own rules for what creates a valid and enforceable prenup agreement. Most states agree that prenups need to be in writing, signed, and entered into freely by both parties. In addition, almost every state requires some level of financial disclosure between the couple.
The primary purpose of a prenup is to outline the financial rights and responsibilities of each party in the event of a divorce, and sometimes in death. People may also include certain non-financial matters in their prenup, such as insurance requirements, pet ownership, and in some states, infidelity clauses. All in all, prenups serve as a practical and responsible way to protect individual assets and financial interests.
What is a Christmas Bonus?
The holiday season brings with it a sense of joy, warmth, and for many employees, the exciting possibility of receiving a Christmas bonus. A Christmas bonus is an additional financial payment that employers often provide to their staff during the festive season as a token of appreciation for their hard work throughout the year.
An X-mas bonus is usually discretionary, meaning it’s up to your boss on whether or not you’ve been a good boy or girl during the year. It’s also separate from your regular salary or wages, so you may receive it in a different pay cycle than your regular check.
Christmas bonuses can take various forms. Some companies give out bonuses in a lump sum payment, while others may give out things like gift cards, physical gifts, or additional paid time off. The timing of bonuses also varies—some employers provide bonuses in December for tax purposes, while others hand them out at the end of the fiscal year.
Protecting Your Christmas Bonus
Your Christmas bonus is a well-deserved reward for your hard work throughout the year. Whether you are expecting to receive a $1,000 bonus or $50,000 bonus, your prenup can make sure it stays in the right hands both during the marriage and if the marriage should end. Here’s how a prenup can help safeguard your holiday windfall:
- Clearly define separate and marital/community property
In a prenup, you can specify which things are considered separate property and which are deemed marital/community property. By clearly defining your Christmas bonus as separate property, you establish that it is yours to keep in the event of a divorce. Generally, bonuses are considered “income” so as long as you are keeping your income separate, you should be okay. Your prenup will likely list out what exactly is considered “income,” such as salary, wages, bonuses, dividends, etc.
- Lay out expectations for spending and expenses DURING the marriage
Yes, you can set requirements for budgets that are meant to be followed while still married! In your prenup, you can dictate whether or not you will utilize joint bank accounts and how money into those joint bank accounts will be handled. For example, you can require only certain expenses to be paid out of a joint bank account and also only allow certain types of income to go into the bank account. So, if you wanted to make sure your Christmas bonus stays separate, even during the marriage, you might stipulate that only regular salary income will go into the joint bank account and the bonuses will go into a separate account, for individual use.
- Addressing future alimony
While it’s not directly tied to a Christmas bonus, waiving alimony in your prenup is one way to avoid losing out on your future Christmas bonuses should you ever get a divorce. One way to do it would be to waive alimony altogether (i.e., say in your prenup that if you get a divorce, no one can ask the other for alimony). Another way to do it is to limit the type of income that is used to calculate alimony in a divorce. Let’s say a lot of your overall income comes from your Christmas bonus. You could, theoretically, create a clause that limits alimony to only your regular salary income, excluding your Christmas bonus from calculating how much alimony your future spouse may get from you.
- Providing a fair and transparent framework
A prenup is also a tool for open communication about financial matters. It allows both parties to discuss and agree on financial expectations, creating a fair and transparent framework for the relationship. It also legally requires some level of financial disclosure which mandates the sharing of finances with your partner. This means you’ll need to include your previous years’ Christmas bonuses in your yearly income as part of your financial disclosure.
Protecting Your Christmas Bonus With a Prenup is Easy!
The holidays are a time for love, family, spiked eggnog, and Christmas bonuses! Who doesn’t love it?! A prenuptial agreement provides a legal and sensible way to protect your Christmas bonus and other assets, ensuring that the spirit of the season is not overshadowed by financial uncertainties. By approaching this topic with open communication and a commitment to fairness, you can enter into the holiday season and your marriage with confidence and peace of mind. Happy holidays!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: [email protected]
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