The Prenuptial Agreement
With half of all marriages in the
United States ending in divorce, signing a prenuptial agreement is becoming more and more
common among couples planning to get married. Despite the myth, prenuptial agreements are
not "just for men". Women are just as likely to bring significant wealth into a
marriage -- assets that need to be protected.
When it comes to marriage, you have to be realistic about the possibility of failure.
What Are They?
Prenuptial agreements, also known as prenups, are pre-wedding contracts that outline how
assets will be divided in case of divorce or death. A properly drafted prenuptial
agreement can help you avoid a costly legal battle. You can minimize the expense and pain
of divorce by specifically addressing how you and your spouse will handle child custody,
alimony, property rights, outstanding debts, or future assets. Prenups can be as broad or
as limited as you and your spouse decide.
Do you need to write a prenuptial agreement before you get married? That depends. If you
don't put it in writing, your assets will be divided based on the laws of the state where
you reside. For community property states, that means your assets will be equally split
between you and your spouse. For equitable distribution states, the court will decide -- a
time consuming event for you and your spouse. How would you rather have your assets
Do You Need One?
Are prenuptial agreements romantic? Not quite. Are they necessary? In some cases, yes.
Prenups are a valuable way to protect your finances prior to tying the knot.
Here are a few reasons you might need one:
- Your net worth exceeds your fiancÚ's.
- You own significant assets such as trusts, real estate, or stocks.
- Your career is likely to take off.
- You are currently supporting your fiancÚ while he is in school.
- You are a partner in a business or firm.
- You have children from a previous marriage.
- You have a higher paying job than your fiancÚ.
- You will receive a considerable inheritance from immediate family or relatives.
- You own a business.
- You are concerned about the debt your fiancÚ has accumulated.