Family Law | Prenuptial Agreements: Not Only for the Rich
A prenuptial agreement, also known as a premarital agreement, is a legally binding contract that dictates how a couple’s assets will be distributed if their marriage ends in divorce or upon death while married. Many people believe that this legal device is only for the rich. While prenuptial agreements are useful in cases where one spouse has significant assets or property, these days, they are quite common for people with varied financial backgrounds.
Specifically, 73 percent of divorce attorneys surveyed in 2010 by the American Academy of Matrimonial Lawyers reported seeing a significant rise in prenuptial agreements. Furthermore, 51 percent of divorce lawyers surveyed in 2012 said they have seen an increase in postnuptial agreements. A postnuptial agreement is a contract between spouses that also protects individual assets in the event of divorce or death. Unlike a premarital agreement, a postnuptial agreement is entered into after the couple marries.
The Importance of Prenuptial Agreements
Why get a prenuptial agreement? There are a few reasons why you may want to consider this legal option. First, if you are wealthier than your partner, a premarital contract can limit, in whole or part, your spouse’s right to your premarital assets. Furthermore, if your marriage does not work out, a prenuptial agreement can be used to limit the amount of alimony available to your spouse. Also, if you plan to marry someone with significant debt, a prenuptial agreement can help guarantee that you are not financially responsible for your partner’s responsibilities if the marriage ends.
Furthermore, if you have been previously married, your legal and financial ramifications may be different in your new commitment. For instance, if you have children from a previous relationship, a premarital contract can make sure that your assets are distributed according to your wishes. In other words, if you have specific allocation preferences for your old and new family, you can help protect them through a prenuptial contract.
Also, if you own a business, you should know that your future spouse could be awarded an interest in your company if your marriage ends. A prenuptial agreement can ensure that your spouse does not become an unwanted partner in your business.
These are just a few issues to consider before you tie the knot. If you do not get one, you will be subject to property division laws of your state. If you are considering creating a premarital or postnuptial contract, it may help to retain a knowledgeable family law attorney. A lawyer can help you evaluate your current situation and draft an agreement.