Contrary to popular belief, prenuptial agreements are not reserved for high-net worth couples. They are legal contracts that any couple can enter into before marriage. Prenuptial agreements can empower couples to strengthen their bonds while simultaneously safeguarding against the risk of a messy divorce.
While discussing a prenuptial agreement may not seem romantic, it is a practical step for protecting both parties and helping to ensure that future disputes can be settled amicably. Prenups can prevent lengthy legal battles and offer clarity about each partner’s financial expectations and responsibilities when they are drafted in thoughtful ways.
Asset and debt division
Many couples come into marriages with their own property, savings or investments, and a prenup can outline how these assets will be managed if the marriage ends. This is especially beneficial if one or both spouses have significant pre-marital assets or expect to receive significant inheritance or gifts during the marriage. A prenup can also protect each party from assuming the other’s debts, such as:
- Student loans
- Credit card balances
- Business liabilities
Without a clear agreement, debts incurred by one spouse during the marriage may become the shared responsibility of both parties in the event of divorce. Therefore, specifying how assets and debts are divided can save considerable stress and help ensure a fair financial resolution.
Spousal support (alimony)
Alimony is the financial assistance one spouse may be required to pay out to the other following a divorce, typically to sustain the lifestyle they had gotten used to during the marriage. Depending on the couple’s agreement, the prenup can either set specific terms for spousal support or waive it entirely.
If one spouse sacrifices their career to raise children or support the other’s professional pursuits, they may be entitled to alimony, and a prenup should reflect these considerations. Couples can use a prenuptial agreement to predetermine various elements of alimony, such as:
- The amount that should be paid out
- The duration of spousal support
- The conditions under which spousal support is granted
By discussing this upfront, couples can avoid contentious debates later, especially in situations where one spouse may feel financially vulnerable after a separation.
While discussing the terms of a prenup can be uncomfortable, it is a prudent step toward helping to ensure that both partners’ financial futures are safeguarded. Couples who are struggling to set the terms of their prenuptial agreements might want to seek knowledgeable legal support to help ensure that this document is practical and enforceable.