Did you know that the rate of divorce is 40 to 50% in the United States? That number climbs higher in second and third marriages. Part of planning for your married life is knowing how to end on good terms.
This post will go over everything you need to know about prenuptial agreements and how to protect yourself in case of a divorce.
The Legal Definition of a Prenup
Prenuptial agreements, which will be abbreviated to “prenup” for the rest of this article, are contacts written for two people before marriage that outline ownership of assets, property, and debts. It’s an important document as it explicitly states what should happen upon divorce or one spouse’s death.
Here are some details of prenups, how they work, and how they could affect you in the event of a divorce.
How Prenups Work
Prenups are not only for those with a lot of money in the bank. These legal agreements are common and practical, especially considering the rate of divorce in America. When drafting a prenup, each person needs their own attorney.
The attorney will go over what assets you have—like separate and marital property—as well as financial responsibilities, taxes, and obligations in the marriage. You will also determine future financial plans like investing, saving for retirement, and spousal support or alimony. It may also offer protection from your spouse’s debts.
Benefits of Prenups
Decisions in prenups are made and agreed on by both parties. Here are some benefits to these agreements:
- Trusts or funds set aside for children are not impacted
- In the event of divorce, you will not inherit the others’ debt (which protects your credit score)
- The terms must be fair
- The division of property ensures each person gets full control after the marriage is dissolved
- Set the terms for alimony payments (amount and length of time)
- Prevents retaliatory actions
- It takes some stress off of the divorce process
- Insights important discussions of expectations and responsibilities in the marriage
- You can include a “sunset clause”
Disadvantages of Prenups
Having factors like division of assets decided before marriage is a smart idea. Although, prenups may pose a few issues:
- Your spouse may believe you think the marriage will end in divorce
- It could signal a lack of trust
- Asking for a prenup may trigger a fight
- One party may refuse to sign a prenup or negotiate the terms
- Prenups do not determine child custody
- Legal fees
- The outcomes may favor one party
- There’s a lot of stigma associated with prenups
When it comes to making these agreements, both parties in the marriage are not always on board. While this is a common joke in sitcoms when one partner refuses to sign a prenup, it can cause serious tension and potential legal issues. Some have a false impression that their partner only wants them to sign such an agreement because they think things will end on bad terms or that the other person will more than their fair share in a divorce.
Ending a Marriage
One of the best things about prenups is that many of the negotiations that typically occur during the divorce process are already decided. This process is best done with an attorney’s help, especially if you have to abide by the guidelines set in place by the contract you signed before marriage or if children are involved. To end a marriage, one spouse must file a legal petition and fill in information specific to that state’s law.
Next, your partner will be notified that you made an official petition for separation. All states all no-fault fillings, meaning you don’t have to prove your significant other did something, but rather the marriage is simply not repairable. This option is better if you worry the request for separation may be denied by your partner.
Depending on your state and situation, you may have to appear before a judge to settle the case. You will have to resolve issues not covered in the prenup, like child support, custody agreements, and discuss spousal support.
How to Divide Assets
Your prenup will say which assets each party is entitled to during the divorce process. However, if circumstances have changed since then, the contract may need to be reevaluated. With the help of an attorney, you can renegotiate distribution.
If you or your significant other wants to change how the divided property in a divorce is handled, you can agree to sell the property for equal profits, give an asset that’s equal in value, and more. The initial decisions made in the premarital contract are not set in stone.
Common Questions About Prenuptial Agreements
Now you know more about the prenup process. Here are answers to common questions about these contracts.
Should My Partner and I Sign a Prenup if We Don’t Have Any Assets?
Yes. Just because you don’t have assets now doesn’t mean you can’t protect future investments or financial accounts (like checking or savings accounts).
What if We Can’t Agree on the Terms?
If you and your soon-to-be spouse can’t agree to the terms in a prenup, it may indicate a more significant issue in the relationship. Make sure your attorney reviews the contract to make sure it is fair. Look into your state’s laws regarding these agreements.
Won’t This Ruin My Marriage?
Much of the stigma around prenups is the idea of dishonesty. If your partner is asking for a prenup, this doesn’t mean they don’t trust you; it’s a practical agreement that helps settle issues in divorce and estate planning.
Protect Your Assets With Prenuptial Agreements
Prenuptial agreements aren’t written because of a lack of trust or to get more than your fair share after a divorce. They outline the division of assets, finances, and debts in the marriage and afterward. Anytime you make a legal contract, enlist the help of a qualified family law firm.
If you found this article on protecting yourself after a divorce helpful, check out the rest of our site for more family and relationship advice.