When planning for marriage and a life together, most couples would never even broach the subject of how to plan for divorce. Of course, everyone knows the statistic that over 50% of all marriages end in divorce, but not yours, right?
Even if that is the case, nowadays people are waiting long and longer to get married, or they are on their second or third marriage. As couples come together later in life, they bring with them assets (and liabilities) from their previous life. Once together, they accumulate property and earn income. Remember, if half of all marriages end in divorce, the other half will end too – with the death of one of the spouses. What is the proper way to ensure that at the end of the marriage there is a fair and equitable distribution of the couple’s property?
One solution is a prenuptial agreement. By sitting down and openly and honestly discussing your financial expectations, you and your future spouse will enter into the marriage with a much clearer picture of what lies ahead.
Why do I need a prenuptial agreement?
You had property before you got married.
In most states, the property you bring into the marriage is yours if the marriage ends. But in other states, after you have been married for a certain period of time, all property becomes jointly owned by both spouses.
You own a business.
You got into business with your partner, not your partner’s husband or wife. Without an agreement in place, your partner’s spouse may become your partner.
You earn substantially more income than your spouse.
A prenuptial agreement can provide for the lower-earning spouse, but still taking into consideration that one party brought in more income into the relationship.
You have children from another marriage.
Children from other marriages have a right to support from their parents. But when your assets are comingled with your spouse, there is a chance you could end up supporting someone else’s family.
You have a large amount of debt.
Coming into the relationship with debt is one thing, but is it the responsibility of your spouse to pay those debts if you divorce?
What can go into a prenuptial agreement?
- Agreements regarding distribution of real estate.
- Cash payments
- Responsibilities of each party during the marriage (financial, household duties, etc).
- How acquired debts and assets are treated.
What cannot go into a prenuptial agreement?
- You cannot include child support provisions. That is decided upon divorce based on agreement or state guidelines.
- Some states do not allow you include alimony. Others do.
- Anything a court would find illegal.
- Unfair conditions.
When done properly, a prenuptial agreement is a way to provide some understanding of what the potential cost of separation and divorce will be. Your agreement is an important legal document, and should be prepared by an experienced, knowledgeable family law attorney. Also, make sure that each party has their own attorney review the agreement before signing. One attorney should not represent both parties in this matter.