Getting a pre-nuptial agreement before getting married can protect you financially if you and your spouse run into misunderstandings in the future. No one wants to think that their marriage will run into problems. Unfortunately, this happens all too often as roughly 50% of marriages end up in divorce. Only when a marriage ends do people realize what a financial nightmare a divorce can be, especially if they didn't plan for the possibility ahead of time.
Depending on your situation, it may be worth putting together a pre-nuptial agreement before your marriage. This simple document would help prevent any serious conflicts in case you do end up divorcing.
What Is A Pre-Nuptial Agreement?
A pre-nuptial agreement is a legal document that outlines how your property and debt will be divided during a divorce. It outlines who will receive what bank accounts, what property, what real estate, and will need to pay what debts. You can also use your pre-nuptial agreement to clarify your financial responsibilities during a marriage. For example, you could agree that you will be in charge of paying all your household bills during the marriage because your spouse earns less money.
If you don't discuss these matters before you get married and you do end up getting divorced, that's when things get messy. During the divorce process, you either go to court or hire an arbitrator to go over your financial situation and decide how to divide everything.
There's a good chance you and your spouse will disagree, especially since you may not be on great terms because of the divorce. In this case, couples can end paying a fortune in legal fees as they try to fight for their fair share of the married property. This whole process would be a lot easier and less expensive if there was a pre-nuptial agreement in place, because the court would just follow that.
Creating A Pre-Nuptial Agreement
For a prenuptial agreement to be legally binding, you and your future spouse must both sign it before you get married in front of a public notary. In addition, you both must have fully disclosed your financial situations before signing the document. If you or your spouse hid assets, the courts could void the agreement during your divorce because it wasn't negotiated in good faith.
There are websites online that can guide you through putting together a pre-nuptial agreement. You enter in your financial information and the website will generate your pre-nuptial agreement that you can print off and sign. You can also hire an attorney to help you put the paperwork together. If you design your pre-nuptial agreement yourself, it would still be worth hiring an attorney to review it to make sure the document is legally binding.
What Cannot Be Included In A Pre-Nuptial Agreement
While a prenuptial agreement can cover a wide range of financial matters, there are a few items that aren't allowed:
Child Support And Custody
Your pre-nuptial agreement can't limit the custody rights of either parent for your children after a divorce. In addition, your pre-nuptial agreement cannot discuss child support either. Since these choices affect another person, your young children, you and your spouse can't make these decisions by yourself. The court would need to review these decisions during your divorce to make sure they are appropriate for the children.
This depends on your state of residence. Some states allow you to waive alimony rights in a pre-nuptial agreement while others do not. Don't assume that a pre-nuptial agreement will prevent you from paying alimony without checking your state laws.
A pre-nuptial agreement is a financial agreement. You aren't supposed to include conditions over personal responsibilities in the document. For example, you can't say who is required to do household chores or set a limit to the number of children you want to have in the pre-nuptial agreement. If you do, the courts could void the entire document.
Who Should Consider A Pre-Nuptial Agreement?
A pre-nuptial agreement isn't for everyone. If your finances are pretty straightforward, it's your first marriage, and you don't have any children going into the marriage, you most likely don't need a pre-nuptial. It wouldn't hurt but it's not a necessity. However, there are some situations where a pre-nuptial agreement really helps:
You Have Children From Before The Marriage
If you have children, chances are you want your money to go to them when you die. If you get divorced, your ex-spouse will take a large part of your savings leaving less of an inheritance for your children. This is a common problem for second marriages where the people marrying already have children. A pre-nuptial agreement would protect their inheritance.
You've Inherited Property Before The Marriage
If your parents or anyone else left you property as an inheritance, they wanted that property to go to you and not your spouse. If you get divorced, your spouse may be entitled to a share of your inherited property. This is a problem especially if you inherited real estate because then you might be forced to sell the property as part of the divorce settlement. A pre-nuptial agreement would keep your inheritance in your family.
You Own Part Of A Business
The people who own part of a business have a say in how the business operates. Right now this is you and your current partners. If you get married and then divorce, your spouse could be entitled to part of the business. This would force you to buy them out, leaving your business in a worse financial situation.
You Or Your Spouse Has A Large Amount Of Debt
If you or your spouse has a large amount of debt, you can protect yourself from creditors with a pre-nuptial agreement. Creditors can try to seize shared marital assets. If you're struggling to pay off debt, the creditors could try to take your spouse's money after your marriage even if your spouse had nothing to do with the debt. A pre-nuptial agreement keeps your property and debt separate so you don't get in trouble with creditors.
You Don't Want Your Spouse To Inherit Your Property
When you die, your spouse has a claim to a large share of your property, even if your will says otherwise. They could go to court and demand a significant share of your property even if you wanted it to go to your children, a charity, or anyone else. By setting up a pre-nuptial agreement ahead of time, you can confirm your inheritance plans and it will be more difficult for your spouse to challenge them in court.
Hopefully, your marriage lasts and you never have to use your pre-nuptial agreement. However, this little bit of planning can avoid major headaches down the road.
Additional Resources At GET.com:
At GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.