Five Reasons to Consider a “Prenup”

Congratulations on your engagement! You’re planning a wedding, and things are chaotic and exciting all at the same time. Word to the wise—don’t forget to add the prenup to your list of things to complete prior to the wedding day.

You may be thinking “I’m NoT gOiNG tO gEt DiVoRcEd, So I dOn’T nEeD a PrEnUp”. Yes, I know you don’t plan to get divorced. In fact, if you expect to divorce your significant other and you aren’t even married yet—that is probably a sign that you should not get married. Prenuptial agreements are not a plan to get divorced.

Prenuptial agreements are a tool to set you and your significant other up for success. Indiana has adopted the Uniform Premarital Agreement Act and has long recognized prenuptial agreements.  Please keep an open mind and give me a chance to explain reasons a prenuptial agreement may benefit you and your significant other:

1.  Transparency

Most people want to know what they are signing up for, don’t you? Think about it--two people’s lives and assets are being combined, for better or for worse. Would you like to know what property and debts your significant other has before legally combining your lives? A prenuptial agreement gives you this information because a full and fair disclosure of financial information is part of the prenuptial agreement process.

2.  You have children from a previous relationship

We live in a society full of blended families, and it can be beautiful. Let me ask you—do you know anyone who has been unintentionally disinherited because a parent left the whole estate to the new spouse? It really does happen. Your marriage will also impact your children—make sure you protect them. In your prenuptial agreement, you can include how your estate plan will be set up to include safeguards so that your kids aren’t accidentally disinherited.

3.  You want to keep the “say so” over your own assets

Okay, it is true that if you and your future spouse do choose to divorce, the prenuptial agreement will be instrumental. Having a prenuptial agreement will probably save a lot of fighting, attorney fees, and frustration, which can ease some of the pains of a divorce.

If divorcing parties aren’t able to agree on the division of assets, do you know who decides? Spoiler alert—it’s the Court, and the outcome can be unpredictable.

Indiana has adopted the one-pot theory of marital property, in which all property owned by either spouse before the marriage, acquired by either spouse in his or her own right after the marriage and prior to the final separation of the parties, or acquired by their joint efforts is part of the marital estate. Ind. Code § 31-15-7-4(a). This one-pot theory ensures that all property from both spouses is subject to the trial court's power to divide and award, Tyagi v. Tyagi, 142 N.E.3d 960, 964 (Ind. Ct. App. 2020), trans. denied, under the presumption that an equal split is just and reasonable, Ind. Code § 31-15-7-5. However, as an alternative to the inclusion of all property in the marital estate per statute, prospective spouses may enter a legally recognized premarital agreement (emphasis added), and "as long as [it is] entered into freely and without fraud, duress, or misrepresentation, and [is] not unconscionable[,]" it will be recognized as a valid contract. Rider v. Rider, 669 N.E.2d 160, 162 (Ind. 1996); see Ind. Code ch. 31-11-3 (the Uniform Premarital Agreement Act, applicable to premarital agreements executed on or after July 1, 1995); Thompson v. Wolfram, 162 N.E.3d 498 (Ind. Ct. App. 2020).

If the worst-case scenario happens, do you want a Court lumping all your assets into “one-pot” and distributing as the Court determines is equitable? A prenuptial agreement helps you retain control of the decisions pertaining to your own assets.

4. You want to retain the right to decide what happens with your estate

Prenuptial agreements go hand in hand with estate planning. Unfortunately, all of us will pass away at some point. When you or your future spouse passes away, what do you want to happen with your assets? Does the family farm need to be retained for your side of the family, or is it okay that it could be divided? Do you want your surviving spouse to take your entire estate? Every situation is unique, but a prenuptial agreement helps you plan and prevent future conflicts by getting everything out onto the table.

5. You expect an inheritance

Fortunately, some of you are expecting an inheritance. One thing to consider is that the loved one who is leaving you that property likely wants you to retain it. Sometimes those loved ones want assurances that you will retain the inheritance before they are willing to leave it to you. A prenuptial agreement can help you retain your inheritance and provide peace of mind to the loved ones giving you the gift.  

 To conclude, prenuptial agreements help set expectations and promote transparency and agreement. Having a conversation surrounding prenuptial agreements can be uncomfortable for some people. However, going into the conversation with a respectful tone and clear intention to set your relationship up for success will be beneficial.

Whether you are preparing for your first marriage or your third, a prenup is likely a good idea.

Disclaimer: This article is for informational purposes only and should not be construed as legal advice. Every situation is unique and should be uniquely assessed by a qualified attorney.

Julie A. Rohrig is an attorney with Williams Law Office, PC located at 920 Kathy’s Way, Suite E, Greensburg, IN 47240. Phone: (812) 663-7601