Bellenot & Boufford, LLC

1. Premarital Agreements protect assets brought into marriage by each party (solely acquired or obtained from a prior marriage).  These can be significant and include a house, retirement funds or other investments.

• Example:  Woman obtained cash buyout of prior husband’s business as a result of their divorce.  She promptly invested the funds with an intent save for her retirement.  She had previously been a stay at home mom and did not have any other savings. She remarries which ends her alimony payments from her ex-husband.  She does not obtain a Premarital Agreement.  After several years the second marriage fails. There is a good chance that her investment fund will be divided or used to offset other assets of the second marriage during the divorce.  Either way, the second husband is getting value from assets the Wife came into marriage with.  A Premarital Agreement could have prevented that.

2. Premarital Agreements prevent sharing of debt brought into the marriage by the other spouse.  Again, this can be significant and include credit card debt, divorce debt, and taxes.

• Example:  Wife has huge credit card debt from prior divorce/marriage.  She remarries.  There is no Premarital Agreement. The couple’s plan is to pay down the debt with the Wife’s income and establish a budget.  New expenses of the second marriage go on Wife’s credit card and the balance is eventually transferred to a joint, lower rate card.  Or maybe the parties refinance all debt into a joint mortgage.  Either step commingles the debt making it likely that the Husband is going to have to own some of Wife’s prior debt if they divorce because the court not going to want, or be able, to figure out how to separate. A Premarital Agreement could have prevented that.

3. Premarital Agreements can prevent or limit a future alimony obligation in case the marriage fails.  Some have had to pay alimony in the past and never want to go down that path again.  In situations where one party is much wealthier than the other, the wealthier party may question whether or not the other’s love is true or not.  A complete waiver (no alimony) can be negotiated but that’s not the only option.  A conditional waiver is sometimes agreed to where alimony is phased out after a number of years or is waived only if the payor does not commit adultery.  Waivers of future alimony are sometimes “purchased” for a present lump sum payments or future lump sum payments only if the marriage fails.  Other scenarios can be agreed to, the goal being to minimize and quantify the risk.

4. Premarital Agreements give rise to protections beyond marriage failure.  Clients are surprised when I  broach the subject of death.  Many don’t realize that there are many decisions they need to make – or at least start thinking about – in the event one of them dies.  This is especially true if they have children from a previous marriage/relationship.

5. The first thing we discuss is titled property (real estate, bank accounts, investments).  Whose name is on the property?  How is the property held?  Is it joint with right of survivorship?  Is it tenants in common?  How it is titled will determine how it will be distributed upon your death and even if it will pass through your Will.  Most people don’t know the answers to these questions and don’t know the consequences of how title is held.

6. If they have Wills, they are often old and outdated.  If you get married and don’t update your Will, the State will decide how your assets are divided upon your death.  If you update your will to include your children but not your new spouse, your new spouse may be able to challenge your will in Probate Court.  This will tie up your estate, cost your estate more and also result in distribution other than your wishes. If you have children from a prior marriage/relationship, they may not be as protected as you desire.  We can address these issues to ensure your wishes are met by using a combination of products such as Premarital Agreements, wills, trusts, life insurance, etc.