Prenuptial Agreement do I need one?The idealist in most of us wants to say that a prenuptial agreement is never necessary. Unfortunately, statistically one in three of all first marriages end in divorce, and 50 percent of second or third marriages will end. Because of these facts a prenuptial agreement, arguably, could just be smart financial planning, especially if you have assets to protect.
We all know marriage is primarily a physical and emotional union, but it is also financial one, and couples who fail to consider the implications of how they will merge their money and what they will do if the marriage does not last may be asking for trouble.
What is a prenuptial agreement?
A prenuptial agreement is a contract, which legally binds two people, and outlines how their assets will be allocated in the case of death or divorce. The prenuptial agreement can be used to codify the financial responsibilities of each spouse if the marriage ends or the expectation of behavior during the divorce. For example, a prenuptial agreement can eliminate the cheating spouse's right to assets or financial compensation if there is evidence they were unfaithful to their spouse.
Other common uses for the prenuptial agreement are to keep your assets separated, keep your debts separated, determine who will inherit property, and determine who will receive what property and assets if there is a divorce.
Do I have to be rich to have a prenuptial agreement?
Prenuptial agreements are not necessarily just for the rich. In fact, if you have saved your entire life and you only have $50,000 you might have a greater reason to protect your investment than others.
So if a prenuptial agreement is not just for the rich who should consider one? Experts suggest those who own a business, have assets they want to protect, who may receive an inheritance, who have children from a previous marriage, or who have extended family that may need care could all benefit from a prenuptial agreement.
How do I ask for a prenuptial agreement?
No one should spring the prenuptial agreement question just as they are opening the box holding the engagement ring. Most experts recommend broaching the question as early as possible, before the engagement. Experts also suggest that it is best to clearly ask for what you want and hopefully you are marrying someone who is good at open communication.
Be ready for questions and maybe even accusations. It's not uncommon for someone to question the level of commitment and trust from someone asking for a prenuptial agreement. There are many valid concerns and arguments against a prenuptial agreement, and they should be ironed out before the marriage.
Prenuptial agreement does not cover everything
If you have questions about how to construct a prenuptial agreement, talk to a family law attorney. Keep in mind, a prenuptial agreement will not cover everything. For instance, the prenuptial agreement cannot contain provisions which violate state law. For example, if your prenuptial agreement waives the right to child support but this violates state law, the prenuptial agreement may not be enforced.