What to consider in a prenuptial agreement
In this interview Vadim Blaustein, the CEO of BlauStein Business Lawyers, responds to questions with regards to the main reasons why the prenuptial agreement is always a good idea, what are the main provisions to be included in the prenuptial agreement and when to sign it.
Vadim, please clarify to us what are the benefits of prenuptial agreement.
Vadim Blaustein: Prenuptial agreement is a way of securing your assets, a tool to availing legal and financial risks associated with a divorce and an additional guarantee that the marriage will not lead to unexpected legal and financial consequences in case of a divorce. Division of property and custody battles may lead to many unhappy years of court hearings about the division of property. That is why agreeing with the partner on the terms of the divorce prior to entering into marriage may not only relieve each party from pain and financial losses but also protect the family and children.
Is a prenuptial agreement always a good idea, or only in cases when you have significant funds to divide?
Vadim Blaustein: I think it is always a good idea for partners to agree on terms which are of significant importance for them, such as finance, children, alimony and other. When two persons enter into marriage, they do not only proclaim their love for each other, but also take legal and financial obligations. Hence, agreeing on such terms is a wise decision independently of the available funds and existing legal obligations.
What are the legal and financial consequences of marriage the parties shall think of beforehand?
Vadim Blaustein: The status of debts before the marriage and after the marriage, determination of the marital and personal property, the status of gifts, inheritance, real estate, investments in the marriage and the provisions on custody are universal. Other provisions depend on the individual priorities and situation of each couple. I would recommend to have an honest conversation on the prenuptial agreement between the partners, and to determine their expectations and priorities. For example, if the parties have debt before entering into the marriage they shall discuss how they intend to divide it. If the parties have assets or expect to inherit assets in the future, they shall discuss the allocation of these assets. If the parties intend to have children, they shall determine how they think it would be fair, reasonable and in the best interest of the children to decide on the custody and financial support of the children. There are many more things to consider, and I would recommend finding a competent legal professional who can represent the interests, priorities and expectations of the parties, and give you recommendations based on the situation and applicable legislation. Such a legal advice is a good investment in the future of each person in the relationships.
What are the main provisions to be included?
Vadim Blaustein: As I said, each couple is unique and each case is different, but if you look at the big picture, each couple shall look into their past, their present and their future. Based on the facts and plans, it is smart to include provisions on division of debts, assets, inheritance and presents from the past and from the future; ensure that the family property, even if not possessed in the present, remains in the family; in the future, establish a financial plan which provides for financial responsibility in case of the divorce, including alimony, division of assets and estate. Another smart idea is to include a provision on how the parties agree to divide the property that they possess together at a given moment in case of divorce; this is very relevant to the couples who have shared assets and business.
Are there any unique provisions that the clients may be interested in?
Vadim Blaustein: In some cases it is agreed between parties that as long as they are married they share the property, and in case of the divorce the property and all the assets remains with the person who owed it or invested in it prior to the marriage. In order for a second partner to ensure his or her financial stability, the parties may agree on an option of calculating the funds for financial support depending on the period of the marriage. Hence, if the parties are married for a longer period, they receive more funds. Also, the parties may agree that if their marriage lasts for a certain period of time, than the prenuptial agreement ceases to apply, and becomes void.
What provisions you cannot include in a prenup?
Vadim Blaustein: That varies from the jurisdiction of the prenuptial agreement, but mostly those are the provisions related to the rights of the children, and the provisions which are considered to be significantly violating the rights of the second party, that no reasonable person would agree to.
When shall the prenuptial agreement be concluded and signed?
Vadim Blaustein: In a perfect scenario, at least 30 days before a wedding day, but it is also possible to sign it after getting married.
To sum up, what are the steps in prenuptial agreement?
Vadim Blaustein: First, both parties have to agree on conclusion of the prenup. Second, they need to determine their financial situation, their property, assets and liabilities. Third, parties shall revert to the legal professional and explain their situation and their expectation and priorities. Fourth, they shall carefully read all the provisions of the prenuptial agreement drafted by the lawyer and make sure that their rights are respected. Fifth, they shall conclude it in a form that is required from the prenuptial agreement. Most of the time, the prenuptial agreement shall be notarized. And remember to keep it in safe place as when the agreement might be necessary, you shall have the original copy.
Thank you very much for participating in this interview. Your time and willingness to share your insights are greatly appreciated.