Although many people traditionally viewed prenuptial agreements as a tool for the wealthy, they are no longer simply for those who are of high net-worth. These contracts are for any couple who wishes to protect the assets they bring into the marriage, keep debts separate, and safeguard business interests. Importantly, couples in the 21st century may also use prenups to encourage financial transparency, clarify financial expectations during the marriage, and ensure individual financial obligations are defined.
The following are several modern considerations for newly engaged couples who are contemplating entering into a prenuptial agreement in Maryland:
1. Clarification of Financial Expectations
A significant reason many couples enter into a prenup is to help prevent protracted litigation over property division in the event of divorce. However, these agreements can also be a powerful tool to encourage financial transparency and clarify financial expectations before a marriage begins and for years to follow. To create a durable prenuptial agreement a couple will need to discuss financial planning and objectives. These conversations can help to reduce the potential for disputes that may arise over money matters in the future.
2. Digital Assets
Many couples today possess not only traditional assets, but also digital assets. These types of assets should also be addressed in a prenup, just as any other property. Digital assets can include the following:
- Cryptocurrency
- Online businesses
- Domain names
- Social media accounts
- Intellectual property
- Airline miles
- Credit card points
A prenup should specify how each digital asset will be characterized in the event of divorce, as well as clarify how revenues from a digital asset would be divided. For instance, a prenup might clarify that any digital asset owned by either spouse prior to marriage be treated as his or her separate property, and also any income the digital asset generates.
3. Debt Management
Modern prenuptial agreements can be a crucial tool for ensuring debts, such as student loans and credit cards, are kept separate. A prenup can help ensure that each spouse remains responsible for paying individual debts, as well as define how debts incurred during the marriage are shared. Alternatively, if a spouse assists the other with paying down separate debts, a prenup can provide for reimbursement in divorce.
4. Lifestyle and Career Clauses
Prenups can include lifestyle and career clauses that define each spouse’s expectations beyond finances. For instance, they may specify penalties for infidelity (such as forfeiture of assets or alimony) or prohibit posting private or slanderous comments about a spouse on social media. Partners may also outline compensation a spouse would receive in a divorce if they gave up their career to care for children or support the other spouse’s career. However, lifestyle and career clauses may not be grossly unfair or violate public policy.
5. Social Media and Privacy Clauses
Social media and privacy clauses can legally define how couples share information about each other on social media. These clauses can prohibit posting private photos, regulate tagging, and establish rules for posting during the marriage and in the event of divorce. A prenuptial agreement can provide financial or other penalties that may be imposed for violations.
6. Business Interests
A solid prenuptial agreement can prevent a spouse’s business interests from becoming subject to equitable distribution in divorce. It can specifically define a business as the sole property of the spouse who originally owned it, along with any appreciation in value that occurs during the marriage. A clause addressing business interests can also specify that the non-owner should have no control over business operations, voting rights, management decisions, or any other aspect of the business - even if both spouses supported and participated in the business during the marriage.
7. Pet Custody
Although child custody matters cannot be determined in a prenup, pet custody can be addressed. Sometimes referred to on its own as a “petnup,” this clause can dictate pet ownership and care in the event a couple parts ways. While Maryland law still views pets as property, rather than members of the family, these agreements can outline who gets to keep the pet in a divorce and any visitation rights, as well as how expenses associated with the pet will be paid.
8. Sunset Clause
Couples often enter into prenups to protect their assets during the first few years of marriage. Under Maryland law, a sunset clause may be included in a prenuptial agreement that makes the document null and void after a certain period of time or the occurrence of a specific event. For example, a couple might agree that the prenup should expire after ten years of marriage or the birth of a child. Once the agreement is no longer valid, the couple might choose to enter into a postnuptial agreement. Otherwise, Maryland law would dictate the division of property and other financial matters in divorce.
Contact an Experienced Maryland Prenuptial Agreement Attorney
If you and your partner are considering entering into a prenuptial agreement, it’s important to ensure it is customized to fit your specific goals and financial needs. At the Law Office of Shelly M. Ingram, our Fulton, Maryland divorce attorneys provide our clients with high-quality legal services for a broad scope of matrimonial and family law matters, including drafting, negotiating, and litigating prenuptial and postnuptial agreements. Trained in collaborative divorce, mediation, and traditional divorce litigation strategies, we work closely with our clients to achieve a favorable outcome in every case.
