What is a prenuptial agreement?
A prenuptial agreement is a written, legally-binding agreement between two individuals before they marry. This document contains terms that they will agree to adhere to if they decide to get a divorce one day.
These terms generally revolve around:
- Which assets will remain separate property
- How spouses will divide their marital property
- Protections for family property
- Designations for spousal support
- Estate plans
A prenup can address more than what is listed above, so long as they are reasonably fair and permitted by law.
Is a prenuptial agreement right for you?
Generally, creating a prenup is a good idea for individuals who stand to lose considerable assets and property in a divorce.
Here are some specific scenarios in which having a prenup would be prudent.
If you make significantly more money than your partner
If you are wealthier than the person you are marrying, a prenup can put limitations on the amount of spousal support you will pay in the event of divorce. It can also help safeguard your personal assets from becoming shared property that could end up going to your spouse.
If you make significantly less money than your partner
Prenups don’t exist solely to protect wealth, but they also can help lesser-earning spouses receive fair compensation in divorce.
If this isn’t your first marriage
If you have children from a previous marriage, a prenup can ensure that their inheritance and property rights remain intact.
If you own a business
A prenup can prevent your spouse from gaining a controlling stake in your company, which will keep your business solely your own.
If your partner has a high debt profile
You may not know this, but debts are also subject to property division in divorce. If your spouse holds a significant amount of debt, a prenup can protect you from being saddled with it later on.
