According to the Census, couples are waiting longer than ever to get married. In fact, from 2008 to 2016, the median age at marriage rose by two years: 28 years old for women and 30 years old for men. Compare that to 1950, when the average age of marriage was 20 for women and 23 for men. That delay in marriage has allowed women to focus on their careers and accumulate more wealth and independence prior to their walk down the aisle. However, at the same time, according to the US Census data, women who have divorced within the last year are almost twice as likely as men to be in poverty. When it comes to prenups, these are statistics women need to keep in mind when crafting their agreement. If you’re wondering how you can protect your past and your future, stay tuned! We have you covered.
The myth that prenups are only used by wealthy older men marrying their young trophy wives is just that – a myth! Prenups are intended to protect both parties, and more and more couples are opting for prenups to keep things fair in their marriage. However, women can still get the short end of the stick. So, ladies here’s what to ask for in your prenup to ensure you are protected.
Protecting premarital property in your prenup
“Protecting premarital property in your prenup” (Say that 10x fast!). As people marry later and later these days, they often have significant pre-existing assets. And did you know single women own more homes than single men? 2.71 MILLION more, that is! With that in mind, it may be prudent for women to make sure to keep what they owned before the marriage separate. Such as a home, bank account, Mona Lisa painting, jewelry collection, investment account, and any other asset that has value.
Beware of Commingling
On the flip side, if you don’t have a prenup, your pre-existing assets are not automatically protected in a divorce, as many people mistakenly believe. Assets you owned prior to marriage can become commingled or be used to offset wealth in a divorce. Sometimes, the labor of love can affect a pre-existing asset, as well. For example, if a spouse put in sweat equity (or monetary equity) to improve a home that was their partner’s pre-existing asset.
Alimony and the stay-at-home parent
Alimony (sometimes called spousal support or maintenance) is crucial if a parent sacrifices their career to care for children. In fact, Pew Research suggests that 10% of highly educated women end up staying home with their children. Even if that’s not in your current plan, include alimony in your prenuptial agreement. Why? Because choosing to be a stay-at-home parent often means lost income, career advancement, and retirement savings.
Protecting Your Future
Alimony compensates for this unpaid labor. It ensures that if the marriage ends, the stay-at-home parent isn’t left with no income and difficulty re-entering the workforce.
Prenup Solutions
Include specific alimony provisions based on your situation. Consider factors like the length of time spent out of the workforce. There are plenty of unique ways you can address alimony in your prenup to fit your unique situation. For example, specifically stating that alimony should only be paid IF children are had. If no children are had? No alimony.
Beyond Alimony
If you dislike the idea of ongoing alimony, explore some other options in your prenup:
- Lump-sum payments: The “lump sum” payment from one spouse to another to equal out the wealth. This can be more enticing for some people because it’s an exact amount to be paid, whereas alimony can sometimes lead to unclear amounts lasting an unclear amount of time, depending on future circumstances.
- Division of retirement accounts: Ensuring the breadwinner spouse is sharing their retirement fund an amount that allows the stay-at-home parent to feel comfortable should things ever go south.
- Property ownership: Other property ownership clauses, such as allotting certain assets to the stay-at-home parent, such as a rental property, investment account, etc.
Protect yourself by outlining ownership of gifts and inheritance in your prenup
Gifts are sometimes (depending on your state) considered separate/non-marital property. For example, if your rich uncle gives you a big, fat check every Christmas, that money would be considered your separate property in a divorce in many states and situations; however, this isn’t always the case. In some states and in some situations, this “big fat check” from Uncle Bob could become joint property. Same thing goes for gifts from your spouse. For example, that Birkin bag you received for your birthday from your boo? Is it separate or shared property in a divorce? Depends on your state laws. Don’t worry, though; Your prenup can help clarify this and protect gifts you receive that are given solely to you.
Don’t forget about those inheritances. If your parents are planning on leaving you a fortune when they pass, it’s prudent to consider making sure their hard-earned cash stays within the family. And, no, inheritances are not always automatically considered separate property in a divorce. It depends on your state.
Debt protection
Did you know that debt can be considered marital property? That means that you could be on the hook for debt accrued during the marriage, even if the debt was accrued by your spouse. This can even extend to business debt and student loan debt. Ending up with the bill for your partner’s debt after a tough divorce can really add insult to injury. In order to protect yourself, you can address debt in your prenup. Specifically, you can specify that any debt accrued during the marriage and before the marriage is the separate debt of whoever obtained it. Of course, this won’t cover loans taken out on your joint property. For example, your mortgage on the jointly owned marital home. As women are twice as likely to come out of a divorce impoverished, make sure that you protect yourself from your partner’s potentially poor financial decisions.
Other considerations to be aware of
The above list, of course, is not exhaustive. Here are a few other clauses women should consider including in their prenups:
- Protecting a business (or future business)
- Infidelity clauses
- Pet custody
- Inheritance
- Terms protecting children from a previous marriage
- Social media clauses
- Estate plan protection
Protect your assets, secure your future
You’ve earned your premarital property – make sure a prenup keeps it yours. If you’re ready for a clear, customized, and affordable solution, look no further than HelloPrenup. Our easy-to-use online platform guides you through creating a prenuptial agreement that fits your needs, all from the comfort of your home.
Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected].
0 Comments