You’ve said “I do” but there are a few minor details to go over…ever heard of a prenup?
A prenuptial agreement, also called a “prenup” or “premarital agreement,” is a legal agreement signed by two individuals before marriage. It covers the financial aspects of their union. It also serves to protect each spouse’s individual assets in case of a death or breakup, and/or to identify each person’s rights and responsibilities toward their assets during marriage.
What are the benefits of a prenup?
- If you have children or grandchildren from a previous marriage, premarital agreements can protect their inheritances. Without a prenup, state law dictates the direction of your assets if there is a death or divorce.
- It protects a personal business, whose shares would otherwise be divided in the event of a divorce.
- It can protect one spouse from taking on the debts of the another.
- It limits the amount of alimony or support that one partner would be obligated to pay to another in the event of divorce.
- It identifies the financial rights and responsibilities of each spouse during marriage.
Are there any drawbacks to prenups?
- If divorce is on the table, the spouse whose support is limited because of the prenup is at a disadvantage.
- A premarital agreement can block your lawful entitlement to a portion of the estate of a deceased spouse.
- One spouse can lose the rights to a share in a business.
How do I create a prenup?
- Write a premarital agreement together with your partner.
- Be sure to include any future business visions or plans for pursuing a higher education; provisions for the extended family; how property and finances will be managed during the marriage; a plan for dividing or distributing property in the event of divorce or death; and whether/how much alimony or spousal support will be awarded.
- Upon completion, the document should be approved by a lawyer and signed by both parties.
How can I ensure the prenup is legally binding?
- Identify the two parties by their full, legal names. Assert that they are entering into the agreement of their own accord.
- State that the parties intend to marry. Record the day it goes into effect.
- Contain truthful information and have reasonable stipulations.
Consult a family or estate lawyer for further guidance.
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