Flicker, Kerin, Kruger & Bissada, LLP
Menlo Park
San Ramon

Do you need to revise your prenuptial agreement?

You don't have to be considering a divorce to wonder about whether your prenuptial agreement needs an overhaul. In fact, it's better to ask those kinds of questions long before divorce is on the horizon.

Unfortunately, if you have significant earnings, the changes in the tax code that are set to take effect in 2019 may be problematic -- especially if your prenup was written with the idea that you'd be able to deduct spousal support from your taxes. Under the new rules, that's no longer possible.

For a lot of couples, the tax code changes present a quandary with no easy solution in sight. They can either choose to start discussions about their existing prenup and try to come to an agreement on revisions, or they can ignore the whole issue and hope for the best.

Neither is an ideal solution.

Prenuptial agreements are often thorny to negotiate before a marriage. They tend to provoke a lot of suspicion and resentment. If a couple is happily married, trying to amend the agreement could provoke tensions and disagreements that don't need to be there. It may also be expensive, requiring each side to have legal representation and necessitating the use of experts to place a value on a couple's assets, especially businesses.

Leaving the agreement untouched is probably the better route for most couples -- as long as the spousal support specified in the agreement is the only major issue that needs to be overhauled. You are basically gambling that you won't get divorced, however.

If you do end up in divorce court, it's far too early to know how a judge is likely to treat a prenup where the spousal support was figured with the old tax laws in mind. The court may not choose to allow the old agreement to stand in the interest of fairness.

If you're still not sure what you should do about your prenuptial agreement, talk the situation over with an attorney. Every case is a little different.

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