Research shows that roughly 40 to 50% of U.S. couples divorce. As a separation lawyer will tell you, prenuptial agreements come in handy during a divorce. Some people think that prenuptial agreements are unromantic and indicate a lack of trust. But nothing is farther from the truth given the many benefits they have to offer. Having a prenuptial agreement takes trust in a relationship a notch higher. But what are prenuptial agreements?
Prenuptial Agreements
Prenuptial agreements are contracts signed before couples commit to marriage. A prenuptial agreement assists in defining debts and assets and how to distribute in case the couple divorces. The popularity of prenuptial agreements keeps growing in the 21st century. This is because a lot of people are marrying later in life when they already have assets of their own. Although the media paints a picture of prenuptial agreements being a preserve of the rich and famous, they are for anyone who’s interested. Even without considerable assets, prenuptial agreements help shield business partners and distribute debts.
It’s possible to get a prenuptial agreement even after marriage. The only difference is that the name changes to a postnuptial agreement. It is always a good idea to have prenuptial agreements the earliest possible as you’ll likely be in good terms. Altering the agreement is also allowed as debts and assets increase as time goes by.
Prenuptial or postnuptial agreements shouldn’t be a reason for couples to quarrel. Both parties need to know that the state makes all asset decisions when dealing with divorce cases without marriage agreements. You and your partner should make such crucial decisions instead of leaving it to the state. A prenuptial agreement is not unromantic — it is simply a smart move. Let’s now take a look at the benefits offered by prenuptial agreements.
1. Revelation of Assets and Debts
Many people marry with no idea about their partner’s assets or debts. This can be a problem as time goes by, especially when it comes to debts that need a repayment. Writing a prenuptial agreement is the perfect way for couples to know each other’s fiscal position. Sitting down to write the agreement also doubles up as a way of viewing each person’s credit report. If you are coming with many assets and your spouse is not, protecting what you acquired before marriage is essential. This is more so if you are older or retired because you might lack time to recoup your money after divorce.
2. Reasonable Decision Making
You’re likely to make considerate and fair decisions during the early days of the relationship. On the flip side, a stressed relationship stands in the way of making sober financial decisions. In short, prenuptial agreements are the best way to ensure fair treatment of both parties should divorce arise.
3. Family Assets Protection
Some people marry for a second or even third time and get children with their respective partners. Children from previous marriages can miss out on important matters such as estate planning. Prenuptial agreements prevent this from happening because the children will own any asset you assign them. If for example, you would want your children to retain certain property, an estate planning attorney can include this in the agreement.
Although you might not want a prenuptial agreement, it could benefit an heir. There are times when parents ask adult children to sign marriage agreements. This is especially when parents don’t want the assets they plan to give their offspring going to other people.
4. Streamlining the Divorce Process
Divorce is probably the last thing on your mind when getting married. Even so, a prenuptial agreement makes the divorce process simpler should both of you go separate ways. This is because you have already agreed on how to divide the assets. This is not to say there won’t be any litigation, but the process won’t be as complicated.
5. Protects Your Business
Having your business listed as a separate entity in a prenuptial agreement is possible. This means that you won’t suffer the pain of liquidation in case of a divorce. With this agreement, all your business interests remain immune to distribution. Remember that the process of business valuation and dividing can be both costly and complicated.
