It may not be romantic, but every couple needs to talk about finances well in advance of heading down the aisle. These conversations can be hard: finances (and the attendant difficulty in communicating about them) are a major stressor in American marriages. Discussing each partner’s debts, liabilities, and assets before wedding bells ring can build a strong financial foundation for a future marriage. Part of that strong financial foundation can—and should—include a prenuptial agreement.
Not Just for the Rich
A prenuptial agreement—better known as a prenup—leaves a bad taste in many people’s mouths. Most people only know of prenups from tabloid accounts of celebrity divorces. However, a prenup can be a valuable tool for couples living with little fame and relatively lesser fortunes than the Hollywood elites.
A prenup lists the individual assets of a couple and stipulates which assets will become jointly held and which will remain separate. Prenuptial agreements are best-known for protecting the assets of a person who is substantially wealthier than his or her partner, preventing the less-well-off partner from claiming an undo share of the other’s assets in case of a divorce. However, there are other reasons to consider a prenup during your engagement—none of which have anything to do with the possibility of divorce.
Other Uses of Prenuptial Agreements
Prenuptial agreements have many uses even within a marriage, rather than just during the dissolution of one. A prenuptial agreement can be a way of protecting a partner’s assets from any judgements taken against the other partner, such as in a lawsuit. For example, if a woman’s sole proprietorship business fails, only her assets would be exposed to creditors, rather than her husband’s as well, if their prenuptial agreement stated that their assets would not be comingled. A prenuptial agreement can be especially important if one partner works in a high-risk field such as medicine, in which malpractice suits are common. With people marrying later in life than previous generations, even relatively young and middle-class couples can have substantial assets—such as a house or business—worth protecting in this way.
In the case of marriages or remarriages in which one or both partners have children from a prior relationship, a prenuptial agreement can specify lines of inheritance. Rather than a deceased partner’s assets defaulting to the surviving spouse as next of kin, a prenuptial agreement can specify that a biological parent’s assets pass on to the biological children rather than a stepparent.
My Office Can Show You Your Prenuptial Options
No matter what your bank account balance, the number of children you may or may not have, or your celebrity status, you may benefit from a prenuptial agreement. I know how to best shape a prenuptial agreement to meet your family’s needs. Call me today to schedule a consultation at (508) 752-2727.