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Prenuptial Agreement

You’ve said “I do” but there are a few minor details to go over…ever heard of a prenup?

Prenuptial

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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