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What is a prenuptial agreement?
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When you’re planning your marriage, finances are probably the last thing on your mind. But a prenuptial agreement, also called a prenup, can be the best investment of your time that you ever make.
A prenup is a contract between you and your spouse-to-be that describes the details of how assets will be distributed in the event of divorce or death. The creation of the prenup forces you to enter into discussions regarding your expectations and future plans as well as the value you place upon such things as giving up a career to stay home and raise children. What better time to decide how your money and assets will be distributed than when you’re in love and feeling good about the other person?
A prenup is important for anyone who has children from a prior relationship or marriage, a loved one who needs your care, substantial assets, property of any kind with a sentimental value, a business, a family business, a pension plan, debts, or has or is developing a professional practice. Even if you have no assets now, you need to plan for future possibilities such as inheritances, gifts, business growth, and career advancements.
Give yourself plenty of time to work on the prenup so that you don’t leave anything out that is important to you. In other words, don’t wait until your wedding day is upon you to spring a prenup on your intended. You’ll need time to fully discuss all the issues that are sure to arise when money is the subject. Once the two of you have started to come to terms you should hire an attorney to draft the official document. Each of you should have your own attorney so that later on the agreement won’t be thrown out for lack of representation. Choose an attorney who is licensed in your state and has experience in doing prenups.
Creation of a prenup requires that each party be honest and that each fully discloses their assets. Failure to do so can disqualify the agreement in a court of law. Completion and signing of the agreement should be done well in advance of the wedding day in order to avoid any appearance of coercion and to give the parties plenty of time to back out of the marriage if discussions break down.
For more information:
Prenups for Lovers by Arlene G. Dubin
Everything you need to know about prenuptial agreements
The Prenuptial Agreement: Expert Law
The Prenuptial Agreement: Nolo
Why is financial literacy a woman’s issue?
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