The Modern Prenup: What’s New for 2019

Not a day goes by that I don’t read an article about how prenups are on the rise, particularly among millennials. In my previous article about prenuptial agreements, I explained that millennials are particularly interested in getting a prenup before marriage as they are getting married later and life and frankly, just don’t want to share their stuff. But millennials are not just changing the game on the number of prenups, they are also influencing what kind of property is covered in those agreements. So what is included in a modern prenup?

I’m a big advocate for prenuptial agreements. Trust me, my friends are tired of hearing me extol the greatness that is getting a prenup before you get hitched. But I don’t just say that to get myself more business. I really believe that a prenuptial agreement can help save your marriage and your sanity if you get divorced. This is why I am so happy to see that what is included in prenuptial agreements reflect the current times.

So what are the new assets that are being included in the modern prenup?

In this article, I’m going to talk about how to deal with the new assets being included in the modern prenup. I’m not talking about houses, cars, or engagement rings. Instead this article is going to discuss how you include the following assets in your modern prenup:

• Pets;
• Bitcoin and other cryptocurrency;
• Frozen embryos;
• Blogs and Vlogs;
• Codes;
• Startups; and
• Websites and domain names.

If you don’t know a lot about prenups and how they work, I encourage you to first check out one of my first articles in which I explained the basics of prenuptial agreements. In that article, I talked about who gets prenups, why you should get one, and how you can use these agreements to preserve your property in the event your marriage doesn’t work out.

All set? Let’s dive in.

You may think of your pets as children, but they are assets for your modern prenup.

If you’ve checked out my About Me page or my Instagram (and if you aren’t following me you really should), you’ve probably figured out that I am pretty obsessed with my dogs. I mean, look at them, aren’t they adorable??

However, I know that I am not alone in my obsession with my furry children. While pets are still considered personal property in some states, they have increasingly become thought of as members of the family, particularly among millennials. 67% of U.S. households own a pet and perhaps even more shocking, Americans spent $72.56 billion on their pets last year! That’s a lot of dog bones! I know that I contributed to that number. So it is no surprise that pets are becoming a favorite topic for prenuptial agreements, a/k/a petnuptials.

Want to know how to how to include provisions for Fido in your prenuptial agreement? Here are some possibilities:

• Who will retain certain pets in the event of a separation or divorce;
• Right of first refusal for post-divorce ownership: If one party has to give up a pet after the divorce they have to offer ownership of the pet to the other party first before seeking a third party home;
• Responsibility for post-divorce veterinary bills, pet insurance and other pet related expenses; and
• Post-divorce visitation schedule. (Note: This may be difficult to enforce in court if one party violates the terms).

Bitcoin and other cryptocurrency: the 21st century asset for your modern prenup.

Bitcoin has been dubbed the 21st century currency. While it is easy to indicate that someone has bitcoin or other types of cryptocurrency in a modern prenup’s financial disclosure, it is difficult to identify and value these types of assets.

Here are some things to consider about including cryptocurrency in your modern prenup.

As cryptocurrency is not held by traditional banks, it may be difficult to provide documentation of what is owned and how much it is worth. Furthermore, the value of cryptocurrency is extremely volatile. This makes it extremely important to identify the date of the valuation in your agreement. You don’t want to be charged with undervaluing the asset and having your modern prenup thrown out simply because you didn’t provide information about when you got the figure provided.

It would also be smart to provide information to your spouse and/or attorney regarding the password to your account and how to access the exchange. While you may not want your spouse to have this information if you get divorced, what if you pass away? Modern prenups can also contemplate what happens to certain assets in the event of a death. It would be a shame to lose a highly valuable asset because you didn’t write down the password.

Frozen embryos: not yet kids, still just assets for a modern prenup

Many couples are using IVF to help them have children. However, have you ever thought about what happens with these frozen embryos after the parties divorce? What happens if one party wants to keep them while the other wishes for them to be destroyed? Could these questions be resolved in a modern prenup?

As more couples use this method to have children, the disposition of frozen embryos has started to become an issue in divorce cases. However, it doesn’t have to be. While a modern prenup can not consider a custody schedule for any future children, you and your intended can include what you want to do with these embryos in your modern prenup. This will help to avoid addressing this extremely emotional issue after separation.

Make sure that your modern prenup terms about frozen embryos and the storage facility language are consistent

If you decide to include a provision about frozen embryos in your modern prenuptial, make sure that whatever you decide is consistent with what is set forth in the contract with the fertility clinic/storage facility.

Most storage facilities require that the prospective parents sign a consent agreement authorizing preservation of the embryos created. These documents should also address what happens to stored embryos in the event the couple breaks up: continue to freeze them, donate them to someone else, donate them to medical research, or destroy them. I have found that this language will control in a divorce where there is no prenuptial or other agreement on what to do.

Your modern prenup should also include who will pay for the storage fees for the embryos after separation. Generally, the person who wants to keep them will be responsible for those costs, which are about $1,000.00 per year.

If you want to include frozen embryos in your modern prenup, I recommend hiring an attorney who is knowledgable about this issue and the related laws in your state. You don’t want to contract for anything that is not valid under the laws where you live.

Blogs and vlogs: income stream or assets for your modern prenup?

Just like Bitcoin may be a 21st century currency, blogging and vlogging are 21st century ways to make money. From ad revenue, affiliate marketing, and product sales, a lot of people are earning a living online.

So is a blog/vlog an asset to be included in your modern prenup?

It can be. While most blogs may be considered simply income generators for the operator, they may have value as an asset as well. This is particularly true if the creator has created programs, ebooks or other products that are sold through their blog/vlog.

Therefore, it is particularly important to exclude your blog and any income derived therefrom in your modern prenup. I’d also specifically list any products or classes sold. Even if you aren’t selling products or making money through this venture now, who knows where it will be in the future. There are many bloggers that have seen their blogs explode in recent years. This is exactly the point of the modern prenup, to protect assets because you don’t know what the future holds for your relationship.

Coding can be an asset for your modern prenup too!

Do you ever wonder how phone apps are created? With code! Computer coding can be an extremely valuable asset. While most creators will start a company which will be the actual owner of their codes, not all do. This is especially true if it is something that you or your spouse have just started working on and doesn’t have any value. Yet.

So what should your modern prenup say about coding?

Do you want to make sure that the code is excluded from distribution in a divorce via your modern prenup? Then, make sure that you include language that excludes not only the coding in its current form but any modifications and additions. This way, if you change something to the code during the marriage that results in a huge payoff, there is no question that the monies earned do not need to be shared with your spouse after separation.

Startups: the ultimate modern prenup asset!

Tech startups aren’t just in Silicon Valley. Inventors all over the world continue to find new ways to make money off of technology. Do you think you have an idea for a tech start up? Include it in your prenuptial agreement! It is the ultimate modern prenup provision!

Again, just like a blog, you may not be making any money from the company just yet. Maybe you haven’t even secured funding. However you have no clue where this business is going to take you. Remember, Facebook and Amazons were once start-ups. Do you want to end up like Jeff Bezos who gave his former spouse a 4% stake in Amazon worth $38 billion? He could have avoided it if he had a prenup!

Don’t want to end up like Jeff? Here are some suggestions for protecting your startup in your modern prenup:

• Make sure to include the business in its present form as well as any companies that may be formed with monies or ideas from the company;
• What if the company takes on shareholders and your interest converts to shares? Contemplate this in your modern prenup;
• Consider what happens if your company is bought by another company and you receive a payout. What happens to the proceeds?
• What if your company is bought or merged with another company and you are given shares instead of cash? Are those shares likewise excluded in your modern prenup?

Websites and domain names: Should you include these in your modern prenup too?

So what are these? Are these assets for your modern prenup? Maybe. Let me explain. There are a lot of websites out there that are simply vehicles to generate income through ad revenue and selling other people’s products.

These types of websites are different than blogs, as the owners likely do not create their own content. Rather, they just repost the work of others and rely on affiliate links and ads to generate revenue. Likewise, there are entrepreneurs who purchase domain names in hopes that another company or person will purchase them for premium prices later on.

Are you one of these people? If you are, you are going to want to protect these assets in your modern prenup. Want to know how?

It’s simple.

List all the website addresses and domain names that you own in your financial disclosure. Also specifically indicate in your modern prenup that any proceeds received from the sales of these sites or domain names would likewise be excluded from distribution in the event of a divorce.

A word about valuing these assets for your modern prenup

In addition to correctly identifying these assets, you also have to think about how to value them. Some, like the bitcoin, may be as simple as getting the value from the exchange. However, valuing codes, intellectual property and start ups can be difficult.

Generally, parties don’t want to spend the money to get a formal valuation from a business evaluator or other third party expert. Who wants to include the cost to value your start up in your wedding budget?

So what should you do about valuations?

If you don’t obtain a formal appraisal for these assets, then you should list the value as unknown in the financial disclosure of your modern prenup. Also, I would highly suggest specifically indicating that your spouse waived the right to have a formal valuation done of the asset and that he/she knows that the value could be considerable and have chosen to forgo their right to find out. This will protect you against the other side arguing that there was lack of disclosure in your modern prenup in the event of a breakup.

Are ready to negotiate a modern prenup?

I hope so! So, if you are about to get married and own any of these assets, please remember to discuss them with your fiancee as well as your attorney when preparing and finalizing your modern prenup. Get them valued by a professional if necessary. Dealing with these assets in your modern prenup now can save you a big headache later on.

Are there other assets that you think should be included in a modern prenup? Let me know in the comments!