So you have met “the one” and decided to get married. But, hey, have you thought about signing a prenuptial agreement? If no, why haven’t you?
Basically, a prenuptial contract, simply known as a prenup, is a document that a couple signs before formalizing their union. The main purpose of the prenup is to separate personal property from marital property should the marriage collapse.
Here are two reasons why every couple should give a prenup a serious consideration before tying the knot.
Keep each party’s assets and debts separate
A prenup separates personal assets from marital assets. Thus, if you have relatively more assets than your soon-to-be-spouse, then signing a prenup would be a great way of ensuring that your partner is not marrying you for wealth. And if you own a business, then you can use the prenuptial agreement to prevent your spouse from claiming a portion of your business should the marriage end in the divorce. Squaring this from the onset is key to ensuring the stability of your business during the divorce process.
Besides separating assets, a prenup can also play an important role in identifying and separating each party’s debts. This way, should you divorce, you will not be exposed to your spouse’s debt.
Protect your estate plan and family property
It is not uncommon to have property that you would love to stay within your family in the event of a divorce. Such assets can be clearly separated from marital property while creating the prenup agreement. This ensures that the fate of any heirloom in your possession is not left for the divorce court to decide.
Alongside protecting heirlooms, you can also use the prenuptial agreement to address questions regarding your estate plan and inheritance.
Divorce comes with serious financial implications for both parties. Find out how a thoughtfully-written prenuptial contract can help protect your rights and interests during the divorce process.