If you recently became engaged, signing a prenuptial agreement might not be the first thing on your mind. However, establishing terms for dividing assets is important for newly married couples. This process should be discussed and completed as early as possible. Established prenuptial terms gives both parties security in the event of a divorce.
Despite the ideas perpetuated in today’s culture, having a prenuptial contract is not only beneficial to celebrity couples. People with varying levels of income can benefit from signing this document when getting married. Even couples who are young and/or in debt should establish prenuptial terms to be used for future reference. Having this information on hand ensures any sudden changes in marital status are handled smoothly.
What Is a Prenuptial Agreement?
A prenuptial agreement is a contract agreed upon by both parties in a marriage. Once the terms and conditions are determined, the contract is signed. This document protects a variety of items and personal and shared financial accounts. Inherited items of value, finances, property and assets in the event of divorce or other sudden separation are listed. Additionally, a defined settlement for each ex-spouse is established on the certificate. Because going through a divorce is often stressful and intense anyway, writing a prenup beforehand prevents further anxiety from being experienced.
Related Article: What is personal finance?
If children are involved in a marriage, the agreement creates protections for them. Children from other relationships may not be included in the prenup document. However, the couple determines the exact stipulations when the paperwork is printed and subsequently signed.
Debts are also covered in a prenuptial agreement. The document establishes how debts owed will be paid if a couple ends up getting divorced. In separation cases without a prenup, significant student loan debt from one party could be divided unfairly between both individuals. Clearly designating what debts each spouse will owe helps couples avoid any confusion in the event of a divorce.
The exact regulations for the legal prenuptial agreement process are established at the state level. Because laws vary by state, you should consult a local attorney to receive details about the relevant policies and regulations. In states with complex laws, more extensive complications could arise from not having a prenuptial document prepared in advance.
Although developing the necessary paperwork is tedious for many couples, the protection provided is well worth the effort put in by both parties. An attorney should be hired to walk each individual through the process and ensure no item is left unclaimed.
Why Getting a Prenuptial Agreement is Smart for Spouses
There are many reasons why a couple can benefit from establishing prenup stipulations as early as possible. During marriage, a mingling of finances, assets, property and debts owed often occurs. Without predetermining how these items will be split up, a divorce proceeding can become extremely complicated. Multiple hearings may ensue in order for a judge to determine how to divide the money and assets between separated individuals.
To avoid any future issues, create a prenuptial marriage agreement establishing a long-term plan for finances and other shared items. The document ensures fairness for spouses who divorce with large income disparities. Even if a married couple does not own many assets or property, they can benefit from the security of an established financial plan for the future. Furthermore, as financial accounts, assets and property are accrued over time, new items can be added into the official agreement.
Related Article: Money and Marriage
Another benefit of signing a prenup is having all financial accounts protected for your lifetime. If your wealth is distributed among pension, retirement, savings or other accounts, the money is contained in all areas. You may be surprised at the amount of money you have between all of your accounts. Try making a list of each form of income to get any idea of the monetary amount a prenup would cover.
Prenuptial marriage documents don’t cover only finances, property and physical assets. In the event of divorce, debt accrued for either party while being married must be split up. You do not want to be stuck with another person’s credit card debt because a prenuptial agreement was not drawn up in advance.
Family heirlooms and other forms of inheritance are covered with the official marriage agreement. Individuals can ensure that important family objects remain within the group and are not awarded to an ex-spouse. Inherited items are often highly sentimental and meaningful in families. Protect these assets by establishing prenuptial terms with your spouse.
How to Create a Prenuptial Contract
The process for building prenuptial agreement documents is time-consuming and thorough. Having a qualified attorney is necessary to guide each spouse through the process. Both parties should hire separate attorneys to avoid conflicts of interest. Your lawyer solely represents your interests when the terms of the agreement are being drawn up.
Before meeting with your attorneys, be sure to talk with your partner about how to allocate all of the finances and belongings within the marriage. Couples should make sure they’re on the same page for developing a prenuptial agreement. Neither party will want to run into surprises when it is time to provide an official signature on the paperwork.
Having a plan already determined in advance allows both spouses to voice their opinions, questions and concerns to each other. The conversations between a married couple will ultimately create the stipulations contained on prenuptial paperwork.
After meeting with the attorneys, the couple must list every asset owned individually or together. A description must also be provided for each item. Next, a list of debts existing between the spouses should be written. This list will also describe how each debt will be handled in the event of divorce or separation.
In some cases, spouses would like to add special clauses for situations that could arise in the future. For example, a property sale or infidelity clause could be established with particular stipulations formed for the couple.
Because every marriage situation has a unique set of assets, financial accounts, property ownership and debt, no prenuptial agreement is the same.
Related Article: Evaluating Your Assets
By Admin –
