A prenuptial agreement, or “prenup” in short, is a legal contract between two people engaged to be married and is effective upon the marriage. The document serves as a way for the soon-to-be-married couple to plan decisions regarding their finances, properties, debts, and everything necessary in the event they divorce.
Why should you get a prenup agreement?
While prenup agreements may sound like there is anticipation for separation, they are in no way a bad omen for a failed marriage, nor does having one mean that you don’t love or trust your partner enough.
Unlike the common misconceptions, prenup agreements are a thoughtful, practical discourse for anyone tying the knot.
Prenup agreements serve as a communication vehicle for openness in the relationship, discussing important matters, planning, and making big decisions, ensuring both parties are on the same page.
This makes it easier to avoid conflict in the future, especially if the union does not work out.
What should you include in a prenup agreement?
Every relationship is different, and the same goes for prenuptial agreements. Prenup agreements are tailored to fit the couple and include whatever they want to discuss.
While there is no definite checklist of what to incorporate, consider including the following relevant topics of interest in you and your spouse’s prenup agreements:
1. Premarital or separate assets and debts
As two individuals uniting in marriage, it is critical to discuss what happens to premarital assets, which are resources or possessions each spouse has before the wedding. This includes finances, properties, inheritances, and even debt.
The prenup agreement states how these assets or debt will be treated, such as whether it retains sole ownership/responsibility or is shared between the couple once they marry.
2. Marital or joint assets and debts
Assets or debts acquired during the marriage are referred to as marital property. This includes anything, whether business assets, household items, or even lottery winnings, as long as it meets the standard that it is acquired while married.
Suppose you and your partner want to keep certain assets or debts separately, such as loans or mortgages. In that case, it’s best to include it in writing in the prenup contract.
3. Children from another relationship or previous marriage
Family dynamics are essential to consider before marrying, especially if one or both spouses have a child or children from a prior relationship.
You can include a detailed section in the prenup agreement addressing how those children will be provided for and discussing inheritances and child support provisions in the event of divorce.
4. Family properties
Suppose you or your spouse have family heirlooms or have shared properties within the family, like vacation homes or businesses. In that case, you and your spouse can establish how these will be treated.
For example, the prenup agreement can include a section stating any heirlooms will be returned in the event of a divorce or perhaps only permit biological children for an inheritance to them.
5. Marital responsibilities and duties
A prenup agreement can include your expectations of your spouse’s responsibilities. While this section can cover anything both parties agree to, the duties stated usually involve caring for the children or how the household finances are handled.
Bank account or credit management, investments, and filing taxes are just some marital responsibilities you can discuss.
6. Work and employment
Work and employment play a massive part in family life, so some formally discuss it with their spouse in a prenuptial agreement.
Both parties can define their expectations regarding work or their careers, talk through scenarios such as job relocations and dual-income households, and discuss work situations in case of separation.
7. Property division in the event of a divorce
A standard inclusion in prenup agreements is the division of properties and assets if the couple chooses to end their marriage. Without this clarification in the prenup agreement, most state laws dictate assets and properties to be divided equally between spouses.
For land properties, the couple can decide which spouse it goes to or if they prefer to sell and split the money from the sale. Then, with the help and guidance of a lawyer, you can discuss your best options for estate and property division.
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