A prenuptial agreement is a contract between two people that are about to be married that spells out how assets will be distributed in the event of divorce or death.
Now, this is not romantic, loving stuff, however, if you don't want divorce court to make the decision about how your assets would be divided, a prenuptial agreement can protect you.
There are nine community property states, which are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The rest of the states are deemed "equitable distribution states"which means assets are divided up between the two parties according to what the court deems fair. The judge would take into consideration length of the marriage, whether there are children, and the couple's age, health, and job skills.
You should consider having a prenup if you fall into any of the following categories:
- You own assets such as a home, stock or retirement funds
- Own all or part of a business
- You may be receiving an inheritance
- You have children and/or grandchildren from a previous marriage
- One of you is much wealthier than the other
- One of you will be supporting the other through college
- You have loved ones who need to be taken care of, such as elderly parents
- You have or are pursuing a degree or license in a potentially lucrative career
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