When you hear the word “prenup,” you might think of those cheesy reality TV shows where someone is trying to get their partner to sign a prenuptial agreement before they tie the knot. While prenups can seem like a bit of a buzzkill, they can actually be really helpful in protecting both parties involved in a marriage. So, what is a prenup and what could it mean for you? Keep reading to find out!
What is a Prenuptial Agreement?
A prenuptial agreement is a contract that each party signs before entering a marriage agreement. This prenuptial agreement manages the property and the financial privileges the individuals or individual owns in the event of a divorce or death.
The Benefits of a Prenup or Prenuptial Agreement
There are various reasons for someone issuing a prenup or even signing one. Some persons may also negatively view prenups, but they also have advantages. Let’s look at why signing a prenuptial agreement is beneficial.
- Signing a prenuptial agreement drives couples to discuss their finances before legally entering a marriage. For many couples, the lack of communication about their finances is a downfall that can later lead to a divorce. Therefore, discussing how to manage their finances would be a lifesaver.
- One of the beneficial uses of a prenup is that your property is protected in the event of divorce. If either party wants to get a divorce, having the prenuptial agreement would easily help decide what parties are entitled to, just in case there is a decision to part ways.
- Signing a prenuptial agreement can help someone by protecting them from the other spouse’s debt. Sometimes, the couple’s finances are combined during a marriage, leading to creditors seizing one party’s property due to unpaid debt. Therefore, the prenup would specify which property would be used to pay the debt if this situation arose.
- In the event of a divorce, having a prenuptial agreement would protect someone’s well-established business. In many situations, someone who has a company and did not sign a prenup before entering the marriage is at risk of dividing the business’s assets. Thus, the prenuptial agreement is a safeguard against the event of a divorce.
- With the prenup, the rights of the children are also protected. In any foreseen situation like a divorce or even death, by signing a prenuptial agreement, you are confident that the children will be taken care of financially before entering into the marriage.
- Most wealthy people make use of prenups, and one of the beneficial uses of the agreement is that it can be a safeguard if you quit your career after entering the marriage. In some situations, a spouse may leave their career just to care for the children, and with the prenuptial agreement, the spouse can be compensated if this situation occurs.
- Many people, particularly the wealthy, would get prenuptial agreements to limit the other party’s spousal support.
- Another benefit of having a prenuptial agreement is that it can save lots of money due to lawyer fees if either party wants a divorce. The harsh reality is that divorce can be costly, complicating, and frustrating. The divorce process to become final would also take some time; thus, the prenup would help eliminate the lengthy divorce battle between parties.
When To Get Married and Not Sign a Prenup
It’s all about your thoughts and feelings about it. Some people believe that a prenuptial agreement must be signed within a marriage; Others don’t think that spouses need a prenup. Here are a few points on when to get married and not sign a prenuptial agreement.
- If spouses put a prenup on the table, it may leave a harsh feeling that divorce is an option within the marriage and makes it possible.
- The presence of a prenuptial agreement within a union could have each party going through a phase of doubt or mistrust in the marriage. The thought of signing a prenup in the marriage may have one party feeling uncomfortable and also the thought of their income where one spouse has a higher income than the other.
- People sign prenuptial agreements, but sometimes, situations can change in the marriage. A decision that is made now in a marriage may change later on.
- Sometimes signing a prenup can be a mistake because couples are in the beginning phases of their marriage. It may seem like that’s the best decision now because you’re deeply in love. One party can also ignore the process of signing the prenup because they can’t imagine the marriage ending.
- By signing a prenuptial agreement, you can lose your rights to receive potential assets from your partner’s business that you helped expand or grow. Since one party signed the prenup, the other spouse doesn’t have to share the company’s increased value.
- The idea of having a prenuptial agreement isn’t a bed of roses. Each party has their lawyers throughout the process, and spouses are trying to earn their assets. The conflict between spouses is usually terrible.
Why You Should Have One Even if Your Partner Doesn’t Want One
It can be difficult even to bring up the thought of having a prenuptial agreement, but there must be a balance between marriage and protecting one’s valuable assets.
Usually, people who propose prenuptial agreements are celebrities and very high-net-worth individuals who own businesses, etc. By all means, the idea of a prenup would protect their assets and prevent divorce proceedings that are publicly broadcast.
How To Write Up The Terms For Your Own Agreement
It depends on what the individual wants to be included in the prenup. Many persons may not know the outcome of a marriage; it could end in divorce or death. There may be different prenuptial agreements. The most important thing is that a prenuptial agreement should never be done in a rushed manner. There are the short, simple ones and others go as long as tons of pages. Here’s an outline of how to write the terms for the agreement.
- The full name of each spouse has to be outlined.
- The circumstances by which the arrangement should become binding (via marriage, civil partnership, etc).
- Be sure that the financial aspect, protected assets, responsibilities, roles between parties, etc., are covered and split into different sections. (e.g. 1.1 Spousal Support, 1.2 Pension, 1.3 Housing)
- Outline the terms that surround the changes that may occur in the future and how this change can affect the prenuptial agreement, for example, illness or unemployment.
- Outline why a particular circumstance can lead to a breach of trust in the agreement. For example, something that can cause divorce like adultery.
- The agreement should be signed by both spouses along with two witness signatures and dated.
How To Prepare Financially Before Signing An Agreement With Your Partner
Before signing the prenuptial agreement, each spouse has to understand each other’s finances and any issues of grave importance relating to the marriage.
Each party can discuss their debts, assets, retirement plans, goals, credit scores, etc. The next important step is to get the best legal advice before doing so.