The prenuptial agreement is a premarital contract that spells out the financial settlements that would take place in the event the marriage ends in divorce. Prenups are usually associated with wealthy people, but they may also be advisable for people with children from prior marriages, business owners or people who may come into an inheritance in the future.
There are several reasons that a person signs a prenuptial agreement. Wealthy people that enter marriage with substantial assets are likely to require a prenuptial agreement on advice of their attorney. Their betrothed may sign the agreement as a stipulation of entering a marriage they desire.
The prenuptial agreement turns the marriage into what seems like a business arrangement, but the agreement can protect both spouses. While one could take a moral high ground and say that people should not enter marriage with the anticipation of divorce, the sad fact is that the divorce rate is high. A prenuptial agreement does not mean there will be a divorce, but offers a level of comfort and assurance in knowing how property and assets will be divided in the event the marriage comes to an end.
People who sign a prenuptial agreement in advance have the psychological benefit of knowing in advance what their financial picture would look like if they get divorced.
People who sign a prenuptial agreement often have assets and property to protect. They may want to make sure that their assets will be kept out of marital property so that they can pass on to their children or specified beneficiaries.
People who have substantial wealth, assets, anticipated inheritance, retirement saving, property holdings and children from a prior marriage can benefit from the assurance offered by a prenup.
It is also common for people who have been married previously to desire a prenup, possibly because both parties have their own assets and children to leave them to. Prenuptial agreements help to assure all parties that the division as assets will not be an issue in case of a divorce.
People who own a business also may wish to have a prenup so that the business stays whole in the event of a claim against it in case of divorce. People who anticipate receiving an inheritance may also try to prevent the inheritance from being considered marital property.
Prenuptial agreements can also benefits the less wealthy spouse, as they have the chance to negotiate their future financial settlement and alimony prior to the marriage, when people should be getting along better.
The prenuptial agreement should be drafted to be fair to both parties, for the sake of the marriage and also to prevent it being overturned in the event of a divorce.
Information in this article is not intended as legal advice. If you have a question about prenuptial agreements, or other legal matters, consult an attorney.
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