No one wants to think about the possibility of divorce when they’re getting married. As a result, Prenuptial Agreements, which are documents that establish the individual assets of married couples if the marriage ends, can be a sensitive topic.
Instead, think of a Prenup as a useful document that can protect individuals who have many individual assets or children from a previous marriage. Anyone who wants to protect aspects of their lives in case of divorce or separation can benefit from a Prenup.
Couples who are thinking of getting married can also use a Prenuptial Agreement to decide what happens to the assets they obtain during the marriage should they choose to end their relationship.
Here are three important things that you should include in your Prenup.
1. Assets and Debts
A Prenuptial Agreement is a good way for you and your partner to maintain separate control over personal assets or property that you accumulated before you were together.
For instance, you might own a company and don’t want to risk losing your business in the event of a divorce or separation. Adding your business as a separate personal asset in your prenup can help prevent that from happening.
Prenups can also determine the ownership of items, such as priceless family heirlooms. For example, if you want to make sure an important piece of art stays in your family, you should list that item in the prenup as a separate personal asset instead of listing it as joint property.
Additionally, if one partner is significantly more wealthy than the other, a prenup could help limit the payable alimony after a divorce. On the other hand, you can use a prenup to ensure that the poorer party receives proper compensation in a divorce.
A prenup can also come in handy if one partner has any debt. A prenup can protect the other person from being responsible for that debt if the marriage ends.
A prenup can also establish pet custody. This can give reassurance that pets aren’t caught in the crosshairs of a divorce. While you cannot establish child custody in a prenup, you can determine who will end up with the pets if your marriage ends.
2. Dependent Children
If you have children from a previous relationship or with your current partner, a prenup allows you and your spouse to determine the children’s property rights and financial inheritances in the event of a divorce or break-up.
Although you can’t include custody, visitation, or child support in a prenup, you can usually use the document to determine how children will inherit property and assets. That way, if there is a need to split assets and property up in a specific way (or, for example, if one child inherits a specific property or asset), then you can establish these terms in your prenup.
3. Protection of Your Estate Plan
In addition to choosing how your children will inherit your property and assets, a prenup can help protect separate personal assets and property from being mixed into the ones obtained during the marriage. This allows you to choose what your partner will receive as part of your estate.
When you are estate planning, consider that a prenup can limit the inheritance of a spouse. This might come in handy if someone has children from a previous marriage when entering into their second marriage. If the partner with children passes away before their spouse without a Will or Prenup, the surviving second spouse will inherit the assets or retirement accounts by law. When that spouse dies, the first spouse’s children might receive nothing, as they are not the second spouse’s descendants.
Using a Prenuptial Agreement
A Prenuptial Agreement is a useful document for couples for various reasons, including providing financial and personal peace of mind. It’s never a bad idea for couples who are planning to get married to consider using a prenup to outline how they will divide their property and assets in the event of a divorce or break-up.
If you’re getting married, signing a Prenup might be a smart decision.