3 Ways a Virginia Prenup Can Hurt You
Prenuptial agreements aren’t a whole lot of fun. In almost every case I’ve ever seen, one party has the other party completely over a barrel, and it diminishes any amount of bargaining power that she might have otherwise had.
But, then again, that’s the point, isn’t it? There’d be no real need for a prenuptial agreement if all things were relatively equal. The “need” for a prenuptial agreement arises when there’s already an uneven amount of bargaining power, and the lesser-earning, lesser-owning potential spouse is forced into a really unromantic and also completely untenable position.
A prenuptial agreement is designed to modify the way the law applies in a particular case. There’d be no need for a prenup if there was no need to modify the way the law works. So, probably, the first step to analyzing how bad a proposed prenuptial agreement actually is is to look at how the law works, and notice all the ways the prenuptial agreement proposes changing the application of those laws to the case at hand.
Usually, we see this manifest itself in a couple of different ways.
1. Defining what separate property is.
I find that a lot of people think that the need for a prenuptial agreement arises when one party comes into the marriage with more than the other.
That’s not really accurate, though, because Virginia law already defines separate property as anything earned, purchased, or acquired through marriage. Other things that are separate? Inheritances designated to one spouse only, gifts from someone other than the spouse, etc.
So, anything you already own going into the marriage is yours separately anyway, and you’d retain it after divorce. So we don’t need a prenup to protect, say, the house you owned prior to marriage, or the savings account, or the retirement you’ve already amassed. That’s separate anyway, and your new spouse wouldn’t receive a portion of that.
What a new spouse WOULD receive a portion of is whatever is earned moving forward. Most prenuptial agreements I’ve seen define separate property differently than how the statute defines it in Virginia, and includes all sorts of kinds of property that Virginia law would classify as marital – like, for example, earnings made through the work of either spouse, or items purchased during the marriage in one party’s sole name.
2. Restrictions (or waivers) of spousal support.
Almost EVERY prenup in the world includes a waiver of spousal support.
Virginia law doesn’t automatically guarantee spousal support (in fact, spousal support is one of the hairier points of law and, when we end up going to court, it’s one of the more common issues), but it does at least allow the possibility.
To learn more about how spousal support works, click here. It’s actually a fairly complicated issue, and bigger than what I can explore in this article today, so a bit more reading is probably a good idea if you’re in this position – or scared that your soon-to-be husband might propose putting you in this position.
Especially where he has a vast amount of separate wealth that you otherwise couldn’t touch, spousal support is important. It will protect you from, like one of my prospective clients said the other day, eating cat food when you’re geriatric.
Spousal support is never a guarantee anyway, and permanent spousal support is reserved for those cases where, generally speaking, it was already a very long term marriage – among other factors, of course, including the statutory factors. It’s not like you’d qualify for permanent support after 6 months of marriage just because he’s a gajillionaire.
Talk to your attorney about what you might really be giving up here, especially if your soon-to-be is talking about you cutting back your work hours or making other big changes to the way you earn your own money after the marriage takes place.
3. Limitation of possibility of earning a portion of retirement benefits.
Now, if you’re marrying an old dude who’s already living off of his retirement benefits that he earned prior to the marriage, there’s not a whole lot of possibility of you earning retirement benefits under Virginia law, either.
Like I said, stuff that was earned prior to marriage is separate property – so if his income is coming from already-earned retirement funds, well, it’s separate.
But if he’s continuing to work and continuing to sock money away for retirement, you should earn a portion of what is contributed during the marriage. Most prenuptial agreements remove this possibility – and that should be a concern to you.
There are other considerations, too, of course – I’m just talking generally about agreements I’ve seen. Some of them vaguely reference a will (in which case, I’d want to see the will, too – and maybe even talk to a wills and estates lawyer too). Still others make a provision for a life estate in a home – again, something that I’d want to verify against a will, and ensure that he can’t change later on. There are lots of agreements that provide for things to be paid to a surviving spouse in the event that the higher-earning spouse predeceases them, and that’s a little more complicated than just a prenuptial agreement. I’d also want to be sure that the estate has the funds to pay for what I’ve been promised.
In many cases, too, the agreement says that a “full and frank” disclosure of assets has taken place, but my client tells me that she has no such knowledge of the assets. In one recent case, I saw a list of husband’s assets that just said things like “IRA” and “Roth” – but didn’t have any detail about the amount of money in each account. That’s…not a full disclosure. That’s actually fairly useless, if the case goes to court. What if he opens a new Roth during the marriage, for example – how would we differentiate that one from the older one, or know what was intended in the agreement, without more identifying information on each account? Make sure that disclosure really has taken place.
Also, don’t be afraid to negotiate. You don’t have to just accept these terms lying down. And, if it doesn’t feel right? Why would you marry a person who doesn’t take your needs into account at all? You shouldn’t feel like you have to give up everything in order to marry him. It doesn’t make you a gold digger to need to know that your needs will be met in the unhappy event that your marriage fails.
I know, I know – it’s not romantic. But that doesn’t mean that you should sign it quickly and get it over with. You need to take a prenuptial agreement seriously, and negotiate in earnest. Some soul searching will probably also be necessary, because you need to really think about whether this is a marriage that you want to be a part of.
For more information or to schedule an appointment with one of our attorneys, give our office a call at 757-425-5200.
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