We read in our gossip magazines all the time about the rich and famous writing prenuptials before entering into a marriage. We are told they do this to protect their assets. Yet, what exactly do prenuptials protect? Do you need to be rich to have a prenuptial agreement? Are prenuptials even necessary?
These are all questions that attorneys are asked when presented with the idea of a prenuptial agreement. Prenuptial agreements are agreements that are determined by a couple before entering into a marriage. These agreements discuss how assets shall be divided in the event the marriage does not last. Independently wealthy people nearly all use prenuptial agreements as a way to protect themselves from bankruptcy or being taken for all they are worth during an ugly divorce process. Yet, they are not the only ones who benefit from a prenuptial agreement. You do not need to be rich to have a prenuptial agreement.
The average American couple can benefit from having a prenuptial agreement in place. The prenuptial agreement separates marital assets as the couple deems fair, but it can also protect each spouse from the other’s spouses existing debt. One friend of mine is stuck in a loveless marriage because the debt incurred by spouse is too much for her to financially pay for in the event of divorce. When a prenuptial agreement is not in place, the courts may rule to split the debt equally in half. Had my friend invested in a prenuptial agreement before her marriage began, she may not be in this financial mess today.
Are prenuptials a bad omen?
There is this stigma that if someone asks you to sign a prenuptial agreement, the marriage is doomed to fail before it even begins. The reality though is that prenuptials can be used for legal protection other than divorce. Prenuptials can be used as a will in the event one of the spouses dies. For instance, couples who have children from existing relationships may wish to set up a prenuptial to ensure their children inherit a portion of assets after their deaths. Think of poor Cinderella who got shafted to the attic and turned into a maid when her father died. Had her father set up a prenuptial, she would not have needed her fairy godmother’s help or to marry the prince. She would have been financial independent.
Prenuptials agreements are used to protect financial assets of the rich and also the commoners. If the marriage fails, then these prenuptial agreements can be used to amicably part ways. However, prenuptial agreements can also be used to protect children’s inheritance after death. If thinking about drafting a prenuptial agreement, seek the help of an experienced attorney.