Many couples enter into a prenuptial agreement before marriage to establish the financial and property rights of each spouse should the marriage end in divorce. As a legally binding document, a prenup is often used for wealthy spouses to protect their assets or for family businesses to be protected. Even if you don’t consider yourself to be wealthy though, you still may want to consider a prenuptial agreement.
Should You Use a Prenup?
Don’t enter into a prenup just because your friends did. Likewise, don’t dismiss the idea simply because nobody you know is using prenups. Every relationship, and the assets that are brought into it, is unique. Only you can decide if a prenup is right.
Prenuptial agreements aren’t only for the wealthy either. Are you planning on giving up your career to raise children? Do you intend to own property together? Will you be keeping your income separate from your spouse? If so, a prenup is worth considering.
A prenup is also worth considering if any of these factors apply to you:
- You own real estate
- You have more than $50,000 in assets
- You own any part of a business
- You have employment benefits (stock options or profit sharing)
- You earn more than $100,000 year
- Your estate names beneficiaries or heirs other than your partner
Benefits of Prenuptial Agreements
It’s not always enough to simply have a discussion with your spouse about separate and joint assets. A prenuptial agreement helps you go beyond the discussion by defining what is marital and what is individual property. It also documents any agreements you and your spouse have made.
In addition, a prenup assigns debt to the appropriate spouse. You can protect inherited property as well by indicating the property will remain with the spouse who inherited it. You’ll also be able to protect the financial well-being of children from a previous marriage.
In the event of a divorce, you’ll be able to avoid lengthy and expensive court proceedings to determine property distribution because the assets will already have been clearly defined. Without a prenup, you’ll be at the mercy of the state laws to determine who gets what in the event of a divorce. Making your own rules is often a better way to go.
Negatives of Prenuptial Agreements
If not handled properly, discussing a prenup can be terribly depressing. Not everyone wants to enter a marriage knowing there is already an exit strategy.
In addition, a prenup does not cover child support or child custody issues. It also can not cover domestic issues like where children will attend school or who will do what chores. If these are included in a prenuptial agreement and a divorce occurs, a judge may consider the prenup to be frivolous and strike it down.
What to Consider
If you move forward with a prenuptial agreement, you should take into account these important considerations.
- Retirement benefits
- Separate businesses
- Savings contributions
- The arrangement of working to put one spouse through school
- How credit card payments and debts will be managed
- Management of joint bank accounts
- Distinguishing between joint and separate property
How to Have the Discussion
If you’re certain you’ll be wanting a prenup, bring it up early enough that you avoid any surprises too close to the wedding. Don’t hide assets, as this can not only void a prenup, but it can hurt your relationship as well. Likewise, don’t hide your feelings or thoughts. Be upfront and honest. And hire separate family law attorneys to ensure you’re getting the protection you need.
Should you find yourself in an unavoidable divorce, be sure to find a good divorce attorney who will keep your best interests (and access to your assets) in mind. Prenup or not, you’ll want a divorce attorney on your side that is experienced and will fight for the best possible outcome for you.
Need a Great Attorney to Prepare a Prenup?
If you’re considering doing a prenup before your marriage, contact experienced family law attorney Ben Carrasco at (512) 320-9126 or request a consultation online!