Understanding Prenuptial Agreements

Understanding Prenuptial Agreements

Before tying the knot, spend some time thinking about whether or not you and your future spouse should consider getting a prenuptial agreement. Many people assume that these types of documents are necessary only for people who are extremely wealthy. However, this is not the case. A prenuptial agreement can be an important form of financial protection regardless of current financial status.

What is a Prenuptial Agreement?

A prenuptial agreement is a legally binding document that people sign before entering into a marriage. This type of document specifies the terms for spousal support and division of assets if the couple does not stay married. The purpose of this type of agreement is to provide financial protection for each person in the event of a divorce or following the death of one of the partners.

What Are the Benefits of a Prenuptial Agreement?

Entering into a prenuptial agreement does not increase the likelihood that the partners will not stay married. What it does is ensure that there will be no question about the financial consequences of a divorce, if one should come to pass, or the death of one of the partners. The agreement specifies how assets will be divided and how spousal support will be determined if the couple divorces. Therefore, when a valid prenuptial agreement exists, the chances of a costly, lengthy divorce battle are greatly diminished.

Who Needs a Prenuptial Agreement?

There is no legal obligation to put this type of contract into place prior to getting married. Whether or not a prenuptial agreement is needed is something that each couple must decide for themselves. It's important for every couple entering into a marriage to make an informed decision about whether or not getting a prenuptial agreement is in their best interest.

The most common situation in which couples seek a prenuptial agreement is when one or both of the partners have significant assets prior to getting married. However, this is not the only circumstances that warrant getting a prenuptial agreement.

Often, people who don't have significant assets when entering into a marriage think that there is no reason for them to consider getting a prenuptial agreement. This is not necessarily the case. After all, questions don't only arise about division of assets that couples have prior to getting married. Prenuptial agreements can apply to future earnings and assets as well as to those that individuals have when they enter into a marriage.

Prenuptial agreements can also provide protection for the interests of one's heirs. In many cases, couples who marry have children before entering into the union. In such a situation, it's common to enter into a prenuptial agreement to protect the children's inheritance rights. A prenuptial agreement can specify how assets will be divided between the surviving spouse and other heirs following the death of one of the partners.

Cautions Regarding Prenuptial Agreements

It's important to be aware that prenuptial agreements are legally binding only if they are in writing. No matter what types of verbal promises are made, there is no legal obligation on the part of either party to honor them. If you determine that a prenuptial agreement is in your best interest, consult an attorney and put the agreement in writing using appropriate legal documentation.

Comments (1)

It should also be noted that prenups can be contested by either party. Prenups are not ironclad, esp. as matrimonial laws change. Changes in the law can invalidate prior contractual arrangements. Courts also have the power to strike agreements that are contrary to common decency, or those that are immoral, etc. Given certain circumstances or changes in the couple's life (material, health, children, etc.), one cannot necessarily assume that the contract is enforceable. An important factor is time, for example.

Another issue to consider are prenups where one or both parties are citizens or residents of countries other than the one they plan to live in. What may be upheld in one country may not hold in another. It can get really complex and expensive in such circumstances.

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