Do I Need A Prenuptial Agreement If I Am Not Rich?

Adele is the latest celebrity to announce she is getting divorced. It is estimated that she is worth $180 million dollars, money she earned during the marriage and is subject to distribution in the divorce. According to Forbes magazine, she does not have a prenuptial agreement. https://www.forbes.com/sites/legalentertainment/2019/04/22/adeles-divorce-180-million-on-the-table/#1c21169c7680
Adele is not the first celebrity to enter into a marriage without a prenuptial agreement. She joins the ranks of Paul McCartney, Jeff Bezos, Johnny Depp and Madonna who all entered into marriages without a prenuptial agreement. For each of those celebrities, the decision to not have a prenuptial agreement cost each of them millions of dollars.

It is not only the ridiculously rich who need a prenuptial agreement. An argument could be made that many celebrities can afford to give up half of their net worth. Jeff Bezos is likely not concerned about how he is going to pay his rent next month. Paul McCartney is not on tour because he is worried about being able to pay his support obligations. But you may not be as fortunate.

In New Jersey, when couples divorce the court will equitably divide their assets. This includes the marital home, retirement accounts, bank accounts, cars and other assets that you both have. It becomes more complicated when you have used the money you had before the marriage to purchase some of those assets. Depending on such facts as the length of the marriage or when an item was purchased, you may not get credit (or full credit) for the premarital funds you used to acquire the home, car or other assets.

A prenuptial agreement will clearly define what you each brought into the marriage. It will also set out what will happen to those assets in the event of a divorce. Prenuptial agreements allow you to protect money or possessions you had before you married and can also protect things like property or funds you receive as part of inheritance after the marriage. Clearly defining what is on the table in the event of a divorce can save you both from the uncertainty of going through the courts while also lessening your attorney’s costs during the process.

Prenuptial agreements can be very important where your future spouse has a significant amount of debt. There are horror stories about couples who end up divorcing right after one spouse’s premarital debts are paid off. The husband or wife started the relationship with tens (or even hundreds) of thousands of dollars in debt. Without a prenuptial agreement, you may not receive credit for all of the money you spent paying off your spouse’s debt. They leave the relationship debt free and you may not have all of the savings or assets you had before you got married.

Negotiating a prenuptial agreement does not have to be a fight. By taking a practical approach you can take much of the uncomfortableness out of the process. Mediation and collaborative practice can be used to successfully negotiate a prenuptial agreement that is mutually beneficial to both you and your future spouse.

While divorce rates are currently on the decline, there is still approximately a 40% divorce rate for first marriages. The probability of divorce increases with second and third marriages. Statistically, it makes sense for all couples to consider a prenuptial agreement. It is like purchasing car insurance. You do not intend to get into a car accident, but if it happens you want to be protected.

Have questions about prenuptial agreements and if it is right for you, call the office at (856)733-0229 to schedule a consultation.