EVERY MARRIED COUPLE HAS A PRENUPTIAL AGREEMENT
Whether they realize it or not, every couple enters into marriage with a prenuptial agreement. That claim may sound far-fetched, but it’s true.
A prenuptial agreement is an agreement that a couple makes before entering into the legal union of marriage. By the time they say “I do”, every marrying couple has agreed to either:
(1) Let their marital and divorce rights be determined by default state laws; or
(2) Create and sign a written premarital agreement that allows them to take back control of their rights in a way that meets their needs.
From a legal perspective, the institution of marriage in our country is the mixed offspring of state laws that generally determine:
who can get married and how;
what rights a couple has while married; and
what rights spouses have when the marriage ends.*
*Every marriage eventually ends, either by divorce or death.
When a couple gets married without a written premarital contract, their prenuptial agreement is to allow state laws to control what rights they have while they are married, and what rights they have when the marriage terminates by death or divorce.
To illustrate, let’s consider how marital property** gets divided in the event of a divorce.
In Virginia, spouses who agreed to let state laws control their rights (i.e. they got married without a written premarital agreement) have agreed that their marital property will be divided by the divorce court based on a system called equitable distribution.*** Equitable distribution does not automatically mean an even division of marital property, because the court will split the property between spouses in a way that is equitable based on the entire picture of the couple’s finances. There are eleven factors that a Virginia court must consider when dividing a divorcing couple’s marital property, which include:
Their monetary and non-monetary contributions to the well-being of the family, and to the acquisition and care of their marital property;
How and when specific items of marital property were acquired;
The ages and health of the spouses;
How long they were married;
Whether either spouse has a pension or expects retirement benefits;
Whether either spouse can support his or herself financially; and
Any other factor the court considers relevant.^
** “Marital Property” belongs to the marriage and each of the two spouses, as opposed to the “Separate Property” that belonged to one spouse before marriage.
*** See Va. Code Ann. § 20-107.3. Virginia is one of more than forty states that has adopted an equitable distribution law for dividing marital property and debts in a divorce, unless the spouses have contracted in writing for a different method of property division.
^These factors are itemized in Va. Code Ann. § 20-107.3(E)(1)-(11).
Importantly, in some states the court can also factor in bad behavior. Where one spouse committed a crime, cheated, was abusive, or was otherwise at fault, those bad acts will count against that spouse when the court evaluates of how the property should be equitably divided.
Given the many factors that must be considered by a Virginia divorce court in determining how to divide marital property under equitable distribution, it is easy to understand why the legal fees paid to the lawyers to fight it out in court can put a couple in the poor house. Moreover, the equitable distribution system necessarily requires a couple who “pre-agreed” to divorce under the default Virginia state laws to air their dirty laundry in public, which can escalate the emotional scarring for all family members affected by the separation.
Today, it is increasingly common for couples to enter into written premarital agreement that avoids the need to ever have a divorce court divide their marital property by equitable distribution. I have prepared premarital agreements for many clients who decided to keep things simple by agreeing with their fiancé that all marital property will be split 50/50 in the event that they divorce. Those couples “pre-agreed” that it was in their best interests to have a written prenup that would divide their joint property evenly, rather than risking an expensive and emotionally draining court battle under the equitable distribution system.
The right to receive alimony or spousal support after a divorce is another major topic that couples frequently address in a written prenuptial agreement, because the default state laws basically leave spouses no real choice but to hire divorce lawyers to fight it out in court.
When deciding whether to award alimony/support to a spouse at all, a Virginia court considers the factors and circumstances that led to the divorce, including the relative fault of the parties (e.g. adultery). In figuring out the amount of alimony to award and for how long, Virginia law requires the court to consider thirteen different factors, one of which is how the marital property will be equitably distributed as described above.^^ A marrying couple that leaves alimony for a divorce court to decide has essentially agreed to battle it out in a public forum with little or no certainty as to the eventual outcome.
Alternatively, a couple can enter into a written premarital agreement where they agree to:
No alimony at all;
No alimony if they divorce early (e.g. no spousal support for either side if they separate before their 5th anniversary);
Guaranteed alimony in a certain amount and for a certain time period (e.g. $1,000 per month for 2 years post-divorce);
Alimony up to a certain amount for the limited purposes of training and/or educating a spouse to re-enter the workforce and become self-sufficient (commonly referred to as “rehabilitative alimony”); or
Almost any other alimony terms on which they can agree.
Thus, a written premarital agreement signed before marriage allows spouses to take control of their destiny in the unfortunate event of separation and divorce by pre-negotiating the path of least resistance and what is in the best interest for both parties. Entering into a customized prenup forces a betrothed couple to have a candid discussion about their expectations during the marriage and what will happen if things don’t go as planned--which helps them to better understand each other before becoming legally bound partners. Signing a written premarital agreement also provides some certainty as to their marital and divorce rights.
In contrast, couples who get married without a written prenuptial agreement have basically agreed to have their rights determined by a default set of marital and divorce laws that they might never have really wanted to rely on, and which may not suit their needs and goals.
^^ See Va. Code Ann. § 20-107.1(E).