Marriage is meant to last a lifetime, but for some couples, divorce, not death, will be the end of their union. Thankfully, divorce rates have been declining recently, but in 2019 they were still over 15%. 1 Talk to your future spouse about a prenup so that the grief and expense, should the unlikely event arise, be reduced.
What Is a Prenuptial Agreement?
Prenuptial agreements, sometimes known as prenups, are formal contracts that a couple forms before getting hitched. What happens to assets and income in the case of a divorce or even death depends on the terms and circumstances set forth by the marriage.
Although some individuals might think prenuptial agreements are only for wealthy couples, anyone can specify the conditions of one. Prenuptial agreements are made to protect parties rather than anticipate divorce.
How Does a Prenup Work?
Each state has its unique prenuptial agreements laws and procedures. For instance, spousal support duties are not required in every state. Prenuptial contracts may cover:
- Alimony
- Financial resources and earnings for children from a prior marriage
managing separate property while separating marital property
estate strategies - Pets
- Whether one spouse owns a firm or a joint venture, ownership of a business
- Debt obligation and financial commitments
Remember that prenuptial agreements do not decide child support; instead, the courts do.
In your state, you should look for a lawyer with experience in matrimonial law if you’re considering getting a prenuptial agreement. The price will depend on your location, your needs, and the lawyer you choose. It could take a few days to draft an agreement if you don’t have numerous assets or detailed demands. It can require several weeks or months to craft if you have complicated requests. As attorneys bill by the hour, the longer it takes, the more money you’ll spend on your prenup.
Prenuptial agreements can be as specialized or as broad as you wish. You can specify in your prenuptial agreement that you retain ownership of your home in the event of a divorce if you already owned it before getting married. Your future spouse may ask for spousal support in the prenup if you are the main provider.
You can include in your agreement if you already have pets or intend to get some once you get married. Pets are generally regarded as property in states. Without a prenuptial agreement, ownership can be decided, for instance, by who paid the adoption fees.
Note
Although there isn’t a prenup that fits all situations, spouses are free to include as many clauses as they see appropriate.
You may incorporate the following clauses in your prenuptial agreement: For instance, you might be entitled to a different settlement if your husband cheats on you and ends the marriage than if you divorce for another reason.
Before signing the marriage contract, the parties will sign the document if they have reached an agreement. A postnuptial agreement can be signed by a couple if they desire to be married and later sign a similar document.
Pros
- Financial openness
- Gets ready for the worst
- Safeguards valuables and assets
- It can be changed
Cons
- Prone to bias
- It could seem offensive.
- Be disturbing
Pros Explained
-
Financial transparency: Many couples are uncomfortable discussing money. Finances are a touchy subject, whether it’s debt, wealth, or even credit scores. A prenuptial agreement necessitates couples meticulously discussing money. Before you get married, you’ll see how your partner handles financial obligations.
Prepares for the worst-case scenario: Most people marry with the expectation of spending their entire lives with their partner. However, it is realistic to believe that divorce is a possibility, even if it never occurs. In the event of a divorce, a prenuptial agreement provides a clear outcome. - Safeguards assets and valuables: A prenuptial agreement should, at its core, protect your assets (and those of your future spouse). A prenuptial agreement includes anything you don’t want your spouse to have if you divorce. It also keeps you safe from your spouse. For example, if your spouse has debt or a business that you do not want to be held liable for in the event of a legal action, you can specify that in your prenuptial agreement.
- Can be changed: You can change your prenup after you marry as long as both parties agree. You can also cancel your prenuptial agreement.
Explained Cons
- Can be biased: Prenuptial agreements can sometimes favor the spouse with more money or assets. You may not know what you’re liable for if you don’t have your own lawyer review it. In the event of a divorce, you may be held responsible for something you were unaware of.
- It may appear insulting: A prenuptial agreement can offend some people. Marriage is supposed to be about love, so why should a business-like contract be involved? Consider how your partner will react when you bring up the subject.
- It is possible to be upsetting: In the event of a divorce or separation, a prenuptial agreement clarifies terms. Considering the end of your marriage when you’re just getting started can be depressing at best.
Who Should Get a Prenup?
Even though a prenuptial agreement isn’t for everyone, acquiring one can be preferable to not getting one.
You own a business: If you own a business, a prenuptial agreement may be necessary to safeguard your ownership interest in the business in the case of a divorce.
You wish to pass assets to your children if you have children from a previous relationship. A prenup safeguards the assets you want your children to inherit or maintain in the case of divorce.
You want to keep certain assets: In a prenup, you and your husband agree on what you will keep for yourself (and give up).
You desire to be in charge of your future: Even if you don’t currently have many assets or a lot of income, you can plan how any future assets will be handled in the event of a divorce.
