5 Reasons Why You Need a Prenuptial Agreement
At its most basic, a prenuptial agreement is an agreement between two spouses-to-be that deals with the financial consequences should their impending marriage end in divorce.
No matter what your personal feelings about prenups may be right now, could putting one in place be a benefit to you? Here are five scenarios in which drawing up a prenuptial agreement is really a no-brainer — and five reasons why you may want to change your views on the topic:
You’ve been married (and divorced) before: If you have already gone through a divorce, then you may already know the time, stress, and money involved when a spouse decides to argue over every last detail of a settlement. Creating a prenup gives you the chance to spell out terms regarding such matters as home ownership, alimony terms, and division of business interests, stock portfolios, and other marital property, thus potentially streamlining the divorce process.
You already have children: When you have children from a previous marriage, a prenuptial agreement can help to protect their financial futures and any inheritances you may have outlined in a estate plan. If you have assets that you have earmarked for your children, the best way to protect them in the event of divorce is to have your soon-to-be spouse sign a prenup stating that he or she can make no claim to them. If there is a specific family heirloom, such as a valuable antique, that you wish left for your children, listing these items in a prenup, as well as your will, can also help ensure your wishes for these items will be fulfilled.
Disparity in income and assets: When one spouse enters the marriage with a much higher income and greater number of assets, it can beneficial to think about what kind of spousal support or asset division would be appropriate should the marriage end in divorce. A much higher-earning spouse may want to offer alimony terms at the outset of the marriage as a simple protective measure.
Likewise, a much lower-earning spouse, including spouses who will stay home to raise children, can negotiate and put in writing a support amount that secures their financial future should the marriage not work out.
Your soon-to-be spouse is in debt: If you are marrying someone with a significant debt load, and don’t want to be responsible for these debts if your marriage ends, a prenuptial agreement can be an easy and effective way to keep all pre-marital debts separate.
You own part of a business: Without a prenuptial agreement, when your marriage ends, your spouse could claim a share of your business, even if you have business partners. Drawing up a prenup can help make sure that your business interests stay separate, or an alternate agreement is signed off before saying your vows.
This may all make sense, but still not sure about the tricky emotions some spouses experience when the idea of a prenup is brought up? Read our blog, “How to Bring Romance Into a Prenuptial Agreement” for tips on bringing up the topic in a more loving, but still matter-of-fact way.
