“In all the world you’ll never find a love as true as mine.” — George Strait
In that first — and hopefully last — marital rodeo, George Strait’s words are the soundtrack of the betrothed couple’s days. And a nuptial agreement should be one of the verses.
Illinois-based attorney Cari Rincker can even count 10 ways nuptial agreements are romantic.
A nuptial agreement — whether pre- or post-marriage — is about “trying to make sure that other person is taken care of financially,” Rincker says.
Here’s her verse for the perfect country love song: “No matter what happens. If I want to throw a pitchfork at you one day, I still want to make sure that you’re financially taken care of and make sure you get a fair shake.”
That fair shake applies to both sides. In her 2017 article titled “Top 10 Reasons Why ‘Prenups’ Are Romantic,” Rincker wrote, “It is a common misconception that prenuptial agreements are really couples ‘planning for a divorce.’
“To the contrary, prenuptial agreements are about empowerment of both parties. Prenuptial agreements allow the parties to take the law in their own hands.”
The “law in their own hands” bit has a few qualifiers. For instance, some states don’t allow for nuptial agreements to address child custody or support.
However, the agreement frequently can create a formula for determining child support.
Nuptial agreements can — and frequently do — outline formulas to:
- determine spousal support
- require life insurance benefits
- establish how a will impacts the agreement
- clarify inheritance rights and property interests for children from previous marriages
For family farms, this is a couple’s opportunity to consider the unique elements of determining farm income and looking at how to manage assets in a way that doesn’t scatter family farm ownership.
“I speak a lot on estate planning topics, and I always talk about the overlap with estate planning, succession planning and business planning … but I almost feel like there’s a fourth overlap, and that’s with nuptial agreements,” Rincker says. “I think farms have to always think about the big D’s: death, destruction, divorce.”
“There’s a man who walks beside me. he is who i used to be. and i wonder if she sees him. and confuses him with me.” — Jason Isbell
As a risk management tool, farm consultant Mike Downey can see the value of nuptial agreements. “I think it’s on the list of risk management tools to have,” he says.
But Downey with UnCommon Farms sees such documents as less reliable than more traditional business governance tools.
“Absolutely, the best way to protect the farm is to leave it in a trust — and provide the heirs with income,” he says. “In that scenario, the land is protected.”
From a business structure standpoint, Downey advocates using an operating agreement or governance document to define ownership eligibility. “You should have an ownership structure in place that spells out who is a permitted owner and who is not a permitted owner,” he says. “It will trump anything else.”
Downey’s experience is the business documents are more likely to stand up in court. A nuptial agreement could be successfully challenged.
That’s true, Rincker says. But it’s less likely to be challenged — and carries an even lower chance of success — when it’s properly structured and fair. With one of the technical legal challenges being whether a partner was “under duress,” she encourages couples to come to terms three months prior to the wedding.
The other primary factor is the fairness element.
“Another misrepresentation is that prenuptial agreements only protect the moneyed spouse,” Rincker says. “And that’s not true. A good prenuptial agreement should absolutely protect both parties. …
“If there is one person that enters into the marriage with either a lot of farmland or an anticipated inheritance of farmland, and the other spouse is perhaps waiving their rights to that farmland, then there’s other ways to compensate them.”
“And over there is where I got down on one knee. you can’t buy that kind of dirt cheap.” — Cody Johnson
Such in-lieu-of compensation can include life insurance, a job with the farm business or other provisions to ensure both partners have financial security. Prenuptial agreements aren’t in-the-event-of-divorce agreements. They are designed to help couples plan for their marriage to be financially successful.
That’s why the first step for couples who come to Rincker is to fill out forms detailing income, assets and any other financial disclosures. She refers to it as getting “financially naked.”
“When people come to my office, more often than not, there is just a little bit of uncomfortableness,” Rincker says. “You can tell they haven’t really have had those discussions. They haven’t really gotten out their balance sheet for the other side. And so, it’s a healthy exercise.”
At the end of the day, nuptial agreements can be seen as foundational for a healthy marriage.
“Everybody knows there’s an economic relationship here, and so all a prenuptial agreement does, really, is allow the parties to come up with their own rules that deviate from the law in whatever way they deem appropriate,” Rincker says. “So, I think it’s really more about empowering couples, instead of having them ‘plan for divorce.’ ”
Rodeo fans might say a nuptial is simply the header and the heeler doubling down for success.