After you get engaged, you may consider getting a prenuptial agreement. A prenuptial agreement, which is also called a premarital agreement or a “prenup,” allows a couple to set the terms for property division in their marriage. Many people have certain misconceptions about prenups and what they do. However, a prenuptial agreement can be very beneficial to anyone entering into a marriage.
One of the misconceptions about prenups is that they are only for very wealthy people. Though wealthy individuals do often utilize prenuptial agreements, a prenup does more than protect the interests of wealthy folk. A prenup can also be used to:
- Protect one party’s assets
- Protect one party from assuming the debts of the other party
- Determine how the property will be dealt with upon death
- Determine financial rights and responsibilities during a marriage
- Avoid potentially long and costly disputes in case of divorce
If you choose not to use a prenup, the state will employ a series of family laws to determine how property is dealt with during and after the marriage, which may not be ideal for one or both parties. For instance, under state family laws your spouse is usually entitled to:
- Receive some of your property upon your death
- Share and receive ownership of property acquired during the marriage
- Share in any debts acquired during the marriage
- Share responsibilities associated with property acquired during the marriage
There could be several potential reasons why one would not want to adhere to the state’s family laws. For instance, you may want your property to pass on to your children from a previous marriage upon your death, rather than your current spouse. Whatever your needs and preferences are, you can cater to them with a prenuptial agreement.
Today, prenuptial agreements are often upheld as valid. Originally, prenups were more heavily scrutinized by judges because they were mostly used to protect a wealthy spouse from a less wealthy spouse. Judges wanted to ensure that the less wealthy spouse was not being coerced into signing the agreement. In addition, judges feared that prenups encouraged the dissolution of marriages. However, today prenuptial agreements are more easily upheld, because divorce and remarriages are more widely accepted. Today, most prenups will be upheld as valid.
Still, prenups are still analyzed to ensure their validity. It is important to take time and care to create a prenuptial agreement that is clear, understandable, and justifiable. A judge can rule that your prenup does not meet state requirements, or that it is otherwise unfair, and your agreement will be set aside. A prenuptial agreement can be denied for a variety of reasons, for instance, if it contains false or incomplete information, if one spouse was pressured into signing, if one spouse did not read it, or if one spouse was not given adequate time for consideration. You should also try to have both you and your spouse review their prenup with their own respective attorneys who can advise you on your rights, and make sure the prenup abides by state laws.
