Things To Discuss Before Drafting Your Prenup

These days, number of couples signing prenuptial agreements is on the rise. If you and your to-be spouse are considering getting a prenup, it’s important that you’re on the same page about certain considerations. 

Common Things To Discuss

When used properly, premarital agreements can lay down a proper plan for you and your spouse’s financial future together – as well as what happens in the case of a divorce. By preparing a prenup checklist, you and your spouse can go over different financial issues with your own family attorneys. According to divorce attorneys, here are some of the core things to discuss with your spouse.  

Have a Clause To Avoid Litigation

Let’s start with the basics. In the event of a divorce, both partners should be on the same page about not wanting a lengthy process that leaves them emotionally and financially drained. Consider adding a clause to the agreement that you’ll choose mediation or other forms of alternative dispute resolution if you split up. This is to save you the hassle of litigation and a messy divorce.  

Plan To Handle Premarital Assets In Case of Divorce 

You and your partner should list out your respective premarital assets and debts to have a clear look at what you own. Once you do this, consider how you’ll manage premarital assets if you decide to split up. Will premarital assets remain separate and go back to whoever acquired them before marriage? Or do you plan on commingling separate property with community property? 

Another thing to discuss is what happens when one party uses their pre-marital assets to pay off the other party’s pre-marital debts, like credit card debt, medical bills, or student loans. Will the former be reimbursed, or will it be considered a gift? Similarly, let’s suppose one party uses their pre-marital assets to purchase a marital home. In this case, will they be reimbursed, or will it be considered a gift? 

Duration of the Agreement 

Your prenup doesn’t need to last for as long as you’re married. In fact, you can set an expiration date for the premarital agreement, also known as a sunset clause. Start by considering if you want the agreement to expire. If you do, then how long should it remain in effect? Will the agreement expire after a certain period, like 10, 20, or 30 years after you’re married? Or will it remain in effect until a specific milestone, like having kids together? Do you plan on renegotiating the terms of the agreement after a certain period of time? It’s possible that you may want different things out of the prenup, so having a clause to renegotiate terms allows you to do just that.  

Gifts From Family Members

You should also discuss how you’ll classify large sums of money that are given as gifts by your or your partner’s family members. Would it be considered the separate property of the spouse who received the money? Similarly, you should consider if the same classification will apply if the sum is a loan. If not, it’s best to clarify who is responsible for paying the loan. 

Marital Property 

Also known as community property, this refers to any asset or debt that you accumulate over the course of your marriage. Although Nevada is a community property state, family attorneys recommend discussing how you and your to-be spouse will handle the assets and income you accumulate. Will you combine and accumulate them or split them equally? It’s also possible to create a completely different arrangement to suit your needs. 

Additionally, it’s best to figure out how you’ll handle major purchases like a new car. This includes clarifying whether one spouse needs to ask the other before making such purchases. Next, you should discuss day-to-day expenses, like household bills and expenses. This includes determining who’ll be responsible for paying these expenses. Other aspects to consider include: 

• Opening joint or separate accounts (or opening both) 
• How much each party will contribute to long-term financial goals, like retirement funds 
• If one party owes child or spousal support, you should determine whether it’ll be paid using marital assets or separate property. If these payments are made using marital assets, you should discuss whether or not the other spouse receives reimbursement in the event of a divorce. 

Distribution of Assets In Case of Death or Disability

Family and divorce attorneys also recommend setting clauses as to how your assets will be distributed in the event of your death. You should especially consider this if you have children from a previous marriage. It helps reassure you that your debts and assets are managed as per your wishes when you pass away or are incapacitated. 

Spousal Support 

According to divorce attorneys and family lawyers, narrowing down the terms of your prenup is the right time to discuss things like spousal support. In the event that you two split up, will there be limitations on the duration and amount of support provided? Each state has its own laws regarding spousal support calculations, so if you plan on doing something differently, make sure to write it down. This includes specifying the terms under which one spouse may not be entitled to spousal support.  

Filing Taxes

In most cases, married couples have to file their jointly, but you can decide to do so otherwise. Family attorneys advise couples to determine whether they’ll file taxes together or separately. If either of you has a premarital tax debt, now’s the right time to discuss who’ll be responsible for paying it. You should also consider that any tax refund received after you get married could be seized to pay off this debt. 

Work and Non-Monetary Contributions

Prenups aren’t just used for clarifying the terms of your financial future after marriage. While discussing the terms of your prenup, you and your to-be spouse can express your opinions on non-monetary contributions. This can include things like managing the home or raising the children.  Although most states recognize such contributions in a marriage, each party should communicate who will be responsible for what role. 

As you can see, there are various issues to consider before drafting the prenuptial agreement. Consulting an experienced family lawyer is a great way to create a prenup that aligns with both parties’ goals.