A prenupial agreement might be a good idea if one of the following applies to your relationship: A prenup, also known as a prenup, is a written contract in which an engaged couple sets out their rights and obligations regarding prenuptial and matrimonial property and debts, and what would happen if their marriage ended in divorce or death. Once you`ve thought about whether you need a prenuptial agreement and what issues should be covered, you should evaluate how comfortable you feel with the idea of a prenup. Familiarizing yourself with your state`s laws or talking to a lawyer can also be helpful. You don`t want to make the mistake of relying on a prenuptial agreement that turns out to be invalid or partially unenforceable. While it is usually the party with the highest earning potential or the most property that will seek the deal, the prenuptial arrangement can be beneficial for both parties. “There have been situations where my clients have been invited by their wealthier fiancées to sign a prenuptial contract. However, during the period of marriage, my clients become the richest party and the agreement also protects them,” says Roxas. Short for prenup, a prenup is a legally binding contract that two people sign before marriage and that covers financial matters and the future of property in the event of divorce, Kelly Frawley, a partner in the marriage and family law department at Kasowitz Benson Torres LLP, told Business Insider. If you or your partner answered yes to one or more of these questions, a prenuptial agreement may be in your best interest. Consult a lawyer if you are unsure of the benefits of a prenup and want to know how it can still be used to protect your current or future assets.
As Frawley puts it, “there has been an upward trend in marriage contracts with younger people who have no family assets to protect and with people starting their first marriage.” If you own a business before marriage, a prenuptial agreement may make sense, as a divorce can destroy a family business. If you own a business with other people, your share of the business can also affect your divorce. A prenuptial agreement may allow the party to decide at its own discretion how to conduct its business now and in the future. “If one of the spouses started a business before the marriage, that spouse may want to prevent the other spouse from acquiring a stake in the business during the marriage,” Schneider explains. “Forensic accounting issues arise when a business gains value during marriage and a spouse wants a share of that increase in business. A prenup can quantify what that interest is, or it can allow the owning spouse to own the business directly, regardless of the contributions that were made during the marriage. “The idea of a prenup came to mind. However, like many people, you may have given up on the idea because you read or seen in the media. For example, you may believe that prenups exist to protect the “richer” spouse from losing their money and assets after a divorce. The truth is that prenuptial agreements solve financial problems; However, you are just as powerful when it comes to helping you and your spouse build trust and establish open lines of communication early in your marriage. Let`s take a closer look.
As soon as possible, there are benefits to having open conversations at an early stage if emotions are not high. “You don`t want the extra stress of discussing your prenuptial agreement with your spouse or lawyer near your wedding date,” Jones says. “The time frame for entering into a prenuptial agreement is different for each couple, but I suggest entering into one at least 30 days before the wedding date. Most engaged couples keep a checklist of items that need to be completed before the big day – signing your prenuptial agreement should be on that list. “Marriage contracts are the perfect way to do this. While they may have a bad reputation – and they`re certainly not for everyone – they have many advantages. To help you decide if a prenuptial agreement is right for your situation, consider the following five benefits: “At first, my prenuptial agreement seemed one-sided — my husband Ted is divorced and has children from previous marriages,” says California-based Dr. Karina von Middendorf, who married herself for the first time last November. The compilation of our prenup ended with a process of several months that involved disagreements and back and forth. But in the end, it was helpful to go through the process as it clarified what our marriage and financial future would look like. “If you would like to discuss a marriage contract, our lawyers will be happy to answer your questions and give you legal advice. Although prenuptial agreements have many advantages, there are some disadvantages you should consider before creating one.
This can range from $1,500 to $10,000, plus more if the property is incredibly complicated. “A simple agreement can be designed for a lump sum,” says Alyease Jones, Esq., a family law attorney based in Chicago, Illinois. “But for more complicated cases, lawyers usually charge their hourly rate.” Normally, the party earning the most income and/or having the most assets would hire a lawyer to prepare the prenuptial contract. “Then the other party would retain the services of a separate lawyer to review and negotiate the terms of the agreement and make suggestions for possible changes and modifications,” Roxas notes. A prenuptial agreement can avoid this heartache and costs. This is mostly money – what assets you and your future spouse have before the marriage and what you would get out of the marriage due to your spouse`s death or divorce. A 2019 Love & Money survey by TD Bank found that 27% of millennials currently keep a financial secret from their partner, which represents significant credit card debt. “Debts before marriage are usually paid by the person who contracted them. However, debts incurred during marriage can often be transferred to both spouses, which puts the non-debtor spouse at a disadvantage,” Brenner explains. If one party is used to spending money and the other party doesn`t want to be responsible for debts incurred during the marriage, a prenuptial agreement can help prevent that from happening, Roxas adds.
Prenuptial agreements can be more expensive because the parties are now married and matrimonial property must be taken into account. “The process may seem boring, expensive, and even unnecessary, but if there`s a divorce, a well-worded deal can be worth its weight in gold,” says Elizabeth Green Lindsey, Esq., a domestic relations and family law attorney based in Atlanta, Georgia and president of the American Academy of Matrimonial Lawyers. “If a party plans to be a stay-at-home parent, a prenuptial agreement can give peace of mind that that spouse will be treated fairly in the event of divorce.” A parent who stays at home gives up work or career advancement to raise a child, which puts them at a disadvantage in the workplace if the marriage later fails,” Brenner says. “Couples often choose to compensate for this if they can afford it by providing a sufficient stream of income and/or property to guarantee the housewife a comfortable lifestyle or income after the end of the child-rearing years, when the marriage ends in divorce.” For example, a prenuptial agreement may make it clear that there is a joint bank account used by both partners to spend joint expenses, savings, and investments, while each party may want to keep some of their respective income for themselves to spend at will. .