Top 8 Benefits of a Prenuptial Agreement

Prenuptial agreements are anything but romantic. A couple in love rarely wants to contemplate the “what if” of divorce. But for some couples, the benefits of a prenuptial agreement can be substantial.

If you are contemplating entering into a prenuptial agreement, it is essential that both parties obtain legal advice. A prenuptial agreement must be consistent with state law or it can be overturned. And even a prenuptial agreement that is legal may not be fair to both parties to the marriage. An attorney can point out potential pitfalls as well as benefits of signing a prenuptial agreement.

What are some of the potential benefits of signing a prenuptial agreement?

Prenuptial Agreement Benefit #1: Certainty

A prenuptial agreement sets out the financial arrangements and understandings of the spouses upon marriage. By setting forth these understandings in a formal agreement, both parties know what to expect and need not worry about what will happen on death or divorce.

Prenuptial Agreement Benefit #2: Preserve Premarital Property and Financial Assets

Parties to a prenuptial agreement can preserve property and financial assets that they owned prior to marriage. This may be important as a matter of prinicple or may be significant for practical reasons such as the obligation to support children from a prior marriage.

Prenuptial Agreement Benefit #3: Debt Protection

If one spouse brings considerable debts to a marriage, a prenuptial agreement can be used to protect assets of the other spouse from being used to satisfy those debts incurred outside the marriage.

Prenuptial Agreement Benefit #4: Protect Family Heirlooms

Keeping family heirlooms out of the marital estate may be important when there are children from a prior marriage or other relatives for whom they are intended. A prenuptial agreement can ensure that family heirlooms are kept out of the marital estate.

Prenuptial Agreement Benefit #5: Protect a Family Business

Keeping control of and property belonging to a family business in the family is one advantage a prenuptial agreement can offer.

Prenuptial Agreement Benefit #6: Protecting Family Members

By entering into a prenuptial agreement, spouses can protect family members who otherwise would not receive marital property in case of death or divorce. Often a prenuptial agreement is used to protect the interests of children from a prior marriage.

Prenuptial Agreement Benefit #7: Minimizing Divorce Acrimony

By entering into a prenuptial agreement, there is less to fight about upon a divorce. The resulting divorce may involve less stress and acrimony.

Prenuptial Agreement Benefit #8: Minimizing Divorce Costs

With 50% of marriages ending in divorce, it is worth considering the potential costs of divorce. The divorce industry is a well heeled one, worth $28 billion per year. The average cost of divorce is $20,000. Costs rise with contentiousness.

Acrimonious fights over property and finances are not only ugly and hurtful, they consume considerable quantities of marital assets. Divorce may be far less expensive if the spouses respective rights are set forth in a prenuptial agreement.

Sources:

http://www.nolo.com/article.cfm/ObjectID/1AA1A917-D838-464B-94552B37E898CED2/catID/BD0FF030-3064-4680-B419B66BA296767C/118/304/247/ART/; http://family.findlaw.com/marriage/marriage-agreements/prenup-pros-cons.html; http://legalcatch.wordpress.com/2007/11/07/advantages-of-a-prenuptial-agreement/; http://www.bankrate.com/brm/news/advice/19990903a.asp;