Prenuptial agreements, called premarital agreements in California and pre-nups by most everyone else, are a contentious topic. Some people think pre-nups are a sort of pre-divorce, and other people think they can decide everything that'll happen when a marriage ends, as long as they have a pre-nup. Neither is correct, but I'll discuss why below.
What Pre-Nups can do
Here on the liberal West Coast, divorce is a fairly simple undertaking, and the state provides for a lot of what are called defaults in the process. This means that, unless the parties have agreed otherwise, the court will split assets down the middle, and order custody according to some set formulae. Generally, the spouse who takes care of the kids most of the time gets sole custody, and the other spouse gets every other weekend and one day during the week.
What a pre-nup can do is change (most of) the defaults. You can specify which piece of property goes with whom, and the consequences of this can be immense. Imagine that Alice and Bill get married, with no pre-nup. Alice is a broke programmer, and Bill has a decent job in medicine. Then, Alice's start-up gets bought by Google for $4 billion. Bill divorces her the next day. How much of that money is Bill entitled to? If there's no pre-nup, Bill gets $2 billion. Kind of rough on Alice.
A pre-nup can specify who gets what, for material things. Alice and Bill could have agreed that any windfall would go to the person who earned it, or they could have specified that, say, the marriage gets 50% and the person who earned it gets 50%. Then, Alice gets $2 billion, and $2 billion goes into the joint account. If Bill divorces her the next day, Alice will end up with $3 billion, and Bill with $1 billion. That seems at least a little more fair.
A pre-nup can also deal with liabilities, and this is more important than a lot of people think. Two words: student loans. If you're married, you're on the hook for your spouse's student loans, and most student loans can't be escaped through bankruptcy. They are a bloated albatross strung along your neck, and maybe that's not what you want to sign up for when you tie the knot. A pre-nup can actually keep debts with the person who incurred them, which can be much better for the marriage as a whole, particularly if you're thinking about buying a car or a house some day.
What Pre-Nups can't do
The one-word answer is Kids. Pre-nups can't decide child custody or child support, because those decisions are made in the best interest of the child, not the parent. Child support is set by formula in both Oregon and California, and it's very hard to get a court to shift away from that. You can, however, specify that you both want the kids to keep learning French, or to stay in a certain church, but honestly, these sorts of agreements are worth very little. Generally, one parent will get sole custody when a marriage ends, and that person's decisions will defeat most pre-nup statements about the children. There are better ways to handle these sorts of things, which we'll be glad to tell you about if you'd like.
The other big thing that pre-nups can't do is punish a spouse for acts that bring the marriage to an end. Frankly it seems farcical to us that, in a country where half of all marriages end in divorce, some people spend time and money thinking up dramatic punishments for a spouse who strays at some time down the road. The courts evidently agree with us, because sections of a pre-nup that punish a spouse for adultery or converting to another religion or whatever are void.
We hope it goes without saying that a pre-nup can't specify how many times per week the couple will have sex or who will do household chores. If you want a contract that specifies that, you need to move to a developing country.
So what sort of pre-nup makes sense for you? We recommend dealing with the big disasters and the big windfalls, by which we mean deciding whether you're going to share huge losses and huge paydays. If there are pieces of property that aren't worth much but are very special to one spouse and not another, specify that those stay with the person who loves them most.
If you have pets you're really attached to, figure out what a custody arrangement will look like for them. Pets, under the law, are property, and things can get extremely ugly in divorce. A good pre-nup can take pets out of the equation entirely, so that you can spare them being caught in the middle.
Last buy not least, a good pre-nup should reflect who you and your spouse-to-be are as people. If you can take care of some major worries, and provide for a little peace of mind, you can get back to focusing on making your relationship work.
If you'd like to talk to us about a pre-nup before your wedding, please shoot us a line here. Our prices are low, and we're particularly good at handling touchy conversations, and leaving everyone feeling good.