What To Know About Prenups – Money issues are one of the leading causes of divorce. Consider a prenup as helping to build a foundation for a strong and long-lasting union. A prenup can be a wise investment, outlining your finances and thwarting a contentious divorce if the marriage doesn’t work out. It can even be useful in deciding pet custody in case of separation.
A prenuptial agreement is a written contract stating rights and responsibilities regarding premarital assets and debts as well as what happens if your marriage ends in divorce or death. The process can seem annoying and expensive, but a well-drafted agreement is advisable in the following situations.
Where prenups can help
- One or both parties has been married before—If you’ve already suffered through an extended and bitter divorce, you may not want a repeat scenario, especially if your ex took advantage of you.
- One or both parties have children—You may want a prenup to protect the financial interests of children from a previous marriage. A prenup can ensure assets remain separate property. A prenup may prevent a fight over a will if a parent dies.
- One party is much wealthier—Is there a large disparity in wealth between you and your beloved? There are rights for spousal support and property division down the road. Having a prenup agreement assures that the marriage is not for the money.
- One party has more debt—Keeping significant credit card debt from your partner? While premarital debts are usually paid by the person who incurred them, debts incurred during the marriage may be allocated to both spouses, putting the non-debtor spouse at a disadvantage.
- One or both parties own a business—A divorce can destroy a family business. If you own a business with other people, their shares may be impacted by your divorce.
- One or both parties want to keep their personal life private—Confidentiality clauses can prevent things like social media exposure and tell-all books.
- One or both parties have an inheritance to protect—You may wish to keep your nonmarital property separate. Avoid unintentional transmutation of your inheritance by maintaining it in a separate account.
- One party plans to be a stay-at-home parent—A prenup can provide security to treat this spouse fairly in a divorce since the spouse is put at a disadvantage in career advancement should the marriage fail. Couples may choose to compensate by providing a sufficient income stream or property to guarantee the homemaker a comfortable income after the child-rearing years are over.
This is just a summary of the complex series of provisions that need to be resolved. Talk to a lawyer for more details. But in the end, you may find that a prenup is less scary than you may have imagined—think of it as buying insurance, specifying that if the spouse engages in drug use, infidelity, gambling or other harmful behaviors, the other spouse is compensated a certain sum.
Copyright, 2023
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