The general wisdom seems to be that, if you bring property into a marriage, you should protect it with a prenuptial agreement – or, even, by not getting married at all.
I can’t tell you how many times someone has told me this. That’s why it’s always a very good idea to talk to an attorney if you have questions on how the law works in your state. Divorce is one of those things that isn’t regulated on a federal level; each state determines what laws apply to divorce, custody, and support cases within its borders. There can be a ton of variability, so what you THINK you know can be incredibly dangerous if you’re wrong.
You should always, always, always ask before making assumptions.
Now, I can’t speak for any other state, but, in Virginia, that’s not what a prenuptial agreement is used to do.
Under Virginia law, in a divorce, we classify property as either separate, marital, or hybrid. Separate property is anything that you earned, purchased, or acquired PRIOR to the marriage, or anything that was given to you at any point (before, during, or after the marriage) from anyone other than your spouse, anything that you received as an inheritance, or money as part of a personal injury settlement.
If you earned it prior to the marriage, it’s separate.
If you earned it during the marriage – regardless of title – it’s marital.
It can be hybrid, too, in the sense that an asset can be part marital and part separate, but we divide out each portion depending on what existed as of the date that you married.
Let’s consider an example.
So, you own a business. It’s worth $1 million at the time that you get married. That’s your separate property. You’re married, and you grow the business to $2 million. You separate.
Some of that $1 million increase is going to be marital, and your spouse will be entitled to a share of it. Some of it will be just an increase that resulted from the previous $1 million valuation; growth over time. Some of it may even be personal goodwill, and that’s not divisible in a Virginia divorce.
How do we decide what’s what? Well, it’s challenging, but we often involve a professional like a business valuator to figure out the math side of things. But what you earned prior to the marriage – and any increase in equity resulting from that original ownership – is still yours separately, even if you separate and divorce.
Even if your spouse does have an interest to the marital portion – what you earned during the marriage – that doesn’t mean he would be a part owner in your business. It means you’d buy out his interest, and sometimes that doesn’t even necessarily mean that cash will change hands. Maybe you’ll trade around assets to equalize values. There are options if you have assets, and you should explore them.
Let’s say you have an inheritance or a trust fund.
You receive $100,000 a year from your trust fund; or you’ve inherited a couple million dollars. Though the court *may* consider this when it comes to determining spousal support – mostly as in you don’t necessarily ‘need’ support if you have access to this independent income, not as in you could have to pay HIM support from your trust fund – he has no interest in the asset itself.
You’re only entitled to the benefit of what was earned during the marriage; because the inheritance was not (even if it was inherited by you during the marriage), its categorized as separate property.
The law already does this. What a prenuptial agreement actually does is that it modifies the way the law would normally apply in cases of divorce. Since separate property is already separate, prenuptial agreements are usually used to change what portion of otherwise marital assets that the spouse would be able to take away from the marriage.
If we’re still talking about the business example from earlier, then a prenuptial agreement might say something like the business, including any appreciation in value from the date of marriage, is 100% classified as separate, that the spouse has absolutely no interest.
While this may be desirable if you’re the higher earning spouse, what I’ve usually seen is the opposite. Basically, a wife is prevented from having any interest in assets to which she would otherwise have had an interest. She wouldn’t have had an interest to what existed prior to the marriage anyway, so that’s not what’s being protected. But she can waive, for example, any right to spousal support, any share of the retirement, or any share of real property purchased by her husband during the marriage. That’s normally what I see.
I don’t see balanced agreements; I don’t see ones that take care of both spouses. Maybe in the case of, say, celebrities or two really wealthy people, that’s the case. But I work on normal cases with normal people, and in those situations there’s usually a higher earning spouse and a lesser earning spouse. A prenuptial agreement is often leveraged against a lesser earning spouse with impunity in a way that – in my personal opinion – is very ugly and callous.
Marriage is supposed to take two strangers and make them partners. In a good marriage, you’ll spend your time together building each other up and becoming more than you would have been able to be on your own. With a prenuptial agreement, it’s usually the opposite; it prevents an already vulnerable spouse from having an entitlement to even the most basic assets that she would otherwise have been guaranteed under the law.
I don’t think anyone ever drafted a prenuptial agreement to be fairer to their spouse. If they did, I’ve never seen evidence of it.
One of the things that I would say to a woman – any woman – who was considering marriage and to whom a prenuptial agreement had been even briefly alluded to, is that it’s not as innocuous as he’ll likely make it sound. Though the specific terms involved may vary, it’s a good idea to have the document reviewed thoroughly by an attorney.
Keep in mind that, like any legal contract, a prenuptial agreement is open to negotiation and input. Don’t be afraid to say no or to add in provisions that protect you. Brainstorm with your attorney, if you are still thinking you might want to marry this guy, about what your options might be and any creative solutions she can think of.
Then again, maybe you’d rather walk away. Or just say flat no.
But he’s not protecting the property that he had prior to your marriage – the law already does that. Don’t fall for that line.
For more information, to request a copy of our divorce book for Virginia women, or to read up on prenuptial agreements, visit our website at hoflaw.com.