What Can and Can’t be Included in a Prenup

In this episode of A Wiser Retirement®, Casey Smith and Missie Beach, CFP®, CDFA®, talk with Leslie O’Neal, a Family Law Attorney and Partner at O’Dell and O’Neal in Marietta, GA. They discuss why prenups are important for everyone, especially in second marriages, and how they act as practical life planning tools like insurance. The conversation covers the need for legal drafting of prenups, the challenges across state lines, and essential tips for anyone getting married.

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Summary

A prenuptial agreement is a contract between two individuals before marriage, outlining how assets, property, debts, and spousal support will be managed in the event of a divorce. While some topics, like custody and child support, cannot be included due to their impact on third-party rights, a prenup can address many financial aspects of a marriage.

How to Discuss a Prenup with Your Partner

The process of negotiating a prenuptial agreement should involve open and honest communication between both parties, with each represented by their own lawyer to ensure fairness and transparency. It’s advised to start this conversation well before engagement to avoid awkward situations and ensure both parties are comfortable with the terms. A prenup agreement should be treated like a life planning document, similar to insurance, offering a structured approach to potential future scenarios.

Key Steps in Creating a Prenuptial Agreement

  1. Legal Representation: Both parties should have their own lawyers to ensure the agreement is fair and transparent.
  2. Asset Disclosure: Full disclosure of assets is crucial in both prenups and postnups to prevent future disputes.
  3. Proper Filing: Keeping a copy of the prenup filed in the county where the marriage will take place is essential to avoid legal complications.

Challenges and Considerations

Understanding the challenges of enforcing prenuptial agreements governed by different state laws is important, as it can complicate the legal process if the couple moves or if the prenup is drafted under foreign laws. Equitable division of assets, especially in states like Georgia, means that assets earned during the marriage will be divided fairly, though not necessarily equally. Therefore, consulting a lawyer to navigate the legalities of a prenuptial agreement is highly recommended.

Benefits of a Prenup

Overall, a prenup agreement is not just about protecting assets but about fostering trust, transparency, and mutual respect in the marriage. It helps couples plan for the future with a clear understanding of financial expectations and responsibilities, ensuring that both parties are treated fairly in the event of a divorce.

By considering a prenuptial agreement, particularly in second marriages, couples can safeguard their financial future, protect inherited assets, and maintain transparency and fairness in their relationship. Whether it’s through a prenup or alternative methods like trusts, taking proactive steps to manage assets can provide peace of mind and stability in any marriage.

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