Prenuptial agreements have long been associated with the wealthy, as a way to keep family heirlooms from a greedy spouse. In fact, the stigma of who and what a prenuptial protects can deter couples leaving loved ones and assets unprotected. While prenups have become more common over recent years, there is still a lot of unknown information about what a prenup is, who and what it can protect, and why it is important.
What is a prenuptial agreement?
Also known as a prenup, this agreement works to determine the terms of a divorce or asset distribution in the case of death. Agreeing to terms of a divorce even before you get married can seem a bit extreme and perhaps unlucky. However, even without any marital doubts, forming a prenuptial agreement can be beneficial for both parties.
What does a prenup do?
Prenuptial agreements can cover almost anything that both of the spouses agree to, but they are often used for a specific range of reasons. Partners use prenups to protect assets acquired prior to the relationship and can declare rules for rights to assets obtained during the relationships. Prenuptial agreements can also:
- Determine the rules for the court to follow regarding assets in the event of a spouse’s passing
- Ensure spouses and former spouses are provided for after one’s death
- Limit business partners access to business-related assets
- Protect an individual’s children’s right to their share of his or her assets after death
- Determine issues related to finances and shared property
- Determine marriage agreements, such as how a couple may spend their money
- Protect partners who are homemakers or who make substantially less money in the event of divorce
Why is it important?
Prenuptial agreements are in everyone’s best interest. Prenups are in place to ensure each partner and their family receive a fair outcome in the event of divorce or death. Even people without sizeable assets benefit from owning them. Prenups can be used to financially protect spouses in specific events. For example, if one spouse had previously acquired a substantial amount of debt, a prenup could be used to protect their partner from becoming financially responsible in the event of the spouse’s death.
Establishing a prenuptial agreement isn’t an omen on a marriage, and shouldn’t be ignored or avoided. Give each partner a few days to think about personal requests, before sitting down to establish the guidelines. Remember that prenuptial agreements should be used to protect each partner, and exercise communication and openness. With a little love, your marriage may prove stronger than ever.
Carin Maxey’s blog posts are not legal advice and are meant for informational purposes only. If you require legal advice, please seek a licensed professional in your jurisdiction.