How a Prenuptial Agreement is lnsurance
Updated: Sep 8, 2020
These are some of the words/phrases associated with insurance. You may have insurance for your business to protect you from major claims against you, or the litigation of those allegations. You may have medical insurance to allocate the risk of expensive, unforeseen procedures to your deep-pocketed insurance provider. And investment managers may buy put options to reduce their exposure to volatile movements in the market (put options are basically bets that stocks or market indexes will fall, which can insure against portfolios that have only long positions in securities.
And you're never asking, expecting, or wanting to benefit from insurance payouts, but hey, it's nice to know that those safeguards are in place, isn't it.
Prenuptial (or antenuptial) and postnuptial agreements, in many ways, act in a similar manner. You don't go into a marriage expecting it to ultimately dissolve through separation and divorce. I've attended numerous weddings of friends and family, and on that magical day, all of them expected to apply the "'til death do us part" clause in concluding the marriage, yet some of them never made it to that finish line. It happens and, to put it in legal terms, it sucks. What can make that "suck" even more is arriving at that unfortunate conclusion knowing that there will be controversy in the division of assets, both present and future. One thing about that controversies: without a marital agreement in place, those controversies can come with quite a price tag.
Prenups/postnups, however, can terminate a handful of those issues before they even simmer, much less boil over. Well-drawn, robust agreements, with multiple bases covered and drawn up by competent counsel, will essentially insure (there's that word) against a number of billable hours charged to you by your lawyer for having to fight, for example, for your future business profits, retirement accounts, real estate property, and even collections of yours. Paying $1000 - $2000 for a prenup can mean the difference between a $40-50k divorce and one with an attorney price tag that's less than half that (still a cost, but could be a whole lot worse!).
I must conclude by urging you to NOT think of these agreements as merely insurance that can potentially save you money should you and your loved one seek a separation. There is truly so much more to it than simply dollars and cents. Their ability to provide financial planning mechanisms for your marriage, for example, can be quite stunning. Their ability to facilitate trust and understanding, while relieving underlying stresses, tends to surprise many. And if an attorney can provide contingencies for situations that the couple had not foreseen and may have created tension if spring on them, then you can enjoy that more more when it comes to peace of mind. Thus, while looking at prenups or postnups as insurance is a smart way to look at them, to not look at them as more than that is to understate their value.
As with many of Abessi Law's services, the initial consultation for those considering these products is free. During that time, you may conclude that this step is not for you, and that's fine. But if you proceed, then we'll figure out together how to make the experience of creating the right agreement for you and your loved one. And that'll give me yet another chance to fine-tune my prenup comedy (a little levity during serious matters doesn't hurt!).