A prenuptial agreement, also called a prenup, is a written contract between two people before they marry legally. Many people think that a prenup is an insult because of what they’ve seen in shows or movies. They see it as a document that protects a rich spouse’s assets after a divorce. However, that’s not really the case. A prenup does explain financial matters, but it encourages open lines of communication and establishes trust between you and your spouse.
It includes a property list and each party’s rights on those properties after marriage. Moreover, it provides information about what happens to assets and finances during marriage and in the event of divorce. In other words, it helps you understand what legal rights you gain and have to let go after getting married.
Are you thinking of entering a prenuptial agreement with your future spouse? Read on to learn how a prenuptial agreement can be beneficial and possibly cause some consequences.
- It Protects Children From A Previous Marriage And Your Business
People who have children from their past marriages and got divorced want to protect their kids with a prenuptial agreement when they marry again. By entering a prenup, you can make sure that your children will obtain specific assets designated to them and will retain their rights they have over your property.
A prenup protects your business too if you have one. You can identify your business as a separate asset in a prenup, so you won’t have to liquidate it in case your marriage ends.
- It Promotes A Fair Share Of Assets
A prenup promotes a fair share of assets as well. Without an agreement, one party may either lose or gain a significant amount of wealth. This is why many retirees who want to marry again consider a prenup to protect their assets, as well as their retirement savings. They don’t want to lose what they’ve worked so hard for.
With the help of a prenuptial agreement lawyer, couples can define what their marital properties are and how their properties will be divided. You can check out websites like mlawgroup.ca to learn about drafting a prenup.
- It Offers Protection From Debt
You might find out too late that your spouse has got debt to pay. Worse, their debt could be significantly higher than yours. In fact, debt that’s accumulated during marriage is usually divided in a divorce while debt obtained before a marriage isn’t. So, to keep yourself from assuming obligation of your partner’s debt situation, it’s necessary to sign a prenup.
Before getting married, you can discuss matters related to debt and enter an agreement on who will be responsible for the repayment of debts. For example, you can both agree that your spouse who goes back to school will have to be responsible for their student debt should you file for divorce.
In short, signing a prenup will block the transfer of your spouse’s financial liabilities if your marriage ends in divorce.
- It Encourages Honest Pre-Marital Conversation
A prenup is an effective approach to have an honest conversation about your assets, liabilities, and finances. Discussing these issues will clear up any misunderstanding you may have and help you define expectations before taking the plunge.
You can take this opportunity to address issues you may have, such as spousal support, premarital property, or inheritance. You can focus on certain issues in your prenup.
Beginning your marriage with open communication and trust will lead to a strong relationship.
- It Promotes A Happier Marriage
In addition, a prenuptial agreement promotes a happier and healthier relationship. Many people think that a prenup hinders a successful marriage. On the contrary, a prenup develops transparency.
You get to set expectations for a successful marriage. You can go over changes you may not see and define financial roles and responsibilities during your marriage. For instance, you can state in your prenup that a joint bank account will be set up for savings, investments, and joint expenses. And you can agree to keep some of your respective income to yourselves and use it for whatever you want.
- It Leads To A Less Stressful Divorce
You probably heard of many stories about couples who were very much in love, got married but ended up getting a divorce. Because there was no prenup, they had to deal with a lengthy and expensive legal battle on property rights.
You can save yourself from this mess by entering a prenup. A prenup that’s well drafted will help you address legal issues smoothly.
- It Triggers Doubt
For some people, a prenup triggers doubt. One party may feel secure while the other might feel doubtful. However, this problem can be resolved through a proper explanation between both parties and legal counseling.
The party with more assets can define the percentage or amount that the other can claim in the event of a divorce. This way, there will be a fair share for both parties.
- It May Lead To Early Divorce
As mentioned earlier, a prenup covers financial matters. However, it can result in early marital separation or a divorce associated with social stigma and stereotyping. For instance, one party might consider ending the marriage because some family members and close friends believe that having a prenup is a form of insult or betrayal of trust.
Discussion of assets and finances can cause distrust as well. You may clash on how assets will be divided in case of a divorce. You might also wonder why the other party is going out of their way to protect their assets.
A prenuptial agreement is often viewed negatively: It’s only for the wealthy who want to protect their assets and finances. However, a prenup is a document that clearly defines your financial roles and responsibilities and offers you the opportunity to build a strong foundation for your marriage.