Contrary to common belief, prenuptial agreements (aka premarital agreements) are not just for wealthy tycoons and celebrities deemed most likely to divorce. While legal agreements of this type are commonly used to protect the assets of a wealthy individual prior to entering into marriage, there are several other reasons where such an arrangement can offer one or more benefits to us mere mortals, too.
A prenup is a legally binding contract between two people that is established before entering into marriage. It essentially spells out the disposition of your assets when the marriage terminates, either through death or divorce. Quite often, though, prenups are used to avoid potential conflict during a marriage. For example, people use an agreement such as this to clarify how all finances will be handled once they tie the knot. Some prenups even specify the type and frequency of sexual relations agreed upon in advance. That doesn’t sound like a recipe for a happy marriage! But really, just about anything can be included in a prenup.
So who should consider a prenup?
- If you were previously married, and subsequently experienced an expensive or turbulent divorce, you may be a bit apprehensive to get remarried. A prenup can help alleviate some of your concerns in the event this marriage doesn’t last forever, either.
- If either one of you, or both of you, have a sizeable amount of assets, or a large difference in earnings, entering into an agreement prior to marriage can help protect your assets and avoid a messy and costly divorce down the road.
- If either one of you has a lot of debt or a financial obligation that could lead to indebtedness, a prenup can be used to keep these debts in the hands of the original owners.
- If one or both of you, are bringing children from a previous relationship, a premarital agreement can definitely avoid potential trouble in the event things don’t work out the way you intended.
- If you own a business, you should protect yourself with a prenup. It may seem obvious that it was your blood, sweat, and tears that was solely responsible for its success. But during a divorce things can get ugly, especially if your spouse should happen to get involved in the business while you are married.
- If you stand to receive a large inheritance, a premarital agreement can be used to keep it in your side of the family.
If you’re already married and beginning to wonder if you should have had a prenup made, it’s not too late. A postnuptial agreement is similar to a prenup, except that it is signed after you get married. Most commonly, a postnuptial agreement comes about because of changes made, after getting married, to a prenuptial agreement. But sometimes a postnuptial agreement is warranted without any previous supporting documents or reasons. For example:
- An unexpected financial windfall or inheritance of property; particularly if it is something that has sentimental value and you want to ensure it gets passed on to descendants on your side of the family.
- You are on your second or third (etc.) marriage, and you’re starting to get the feeling this one won’t last “as long as you both shall live,” either.
- Your marriage is over, but for financial or other reasons, you decide to separate, rather than get divorced. A postnup can clarify financial and other issues going forward.
- Perhaps it was a whirlwind marriage, or for whatever reason, you didn’t have time to get a prenup prior to your wedding day. Better late than never. A postnup may be your answer.
Remember, any written marital agreement you enter into now can later be challenged and its validity decided upon by a court of law. So you should have the agreement drafted or (if you do it yourself) reviewed by an experienced attorney. That way, you will increase the chances of it holding water if you should need to rely on your agreement at some point in the future. Hopefully it will never become an issue!