Prenuptial Agreements: Do You Need One?
Marriage is a big commitment. Prenuptial agreements can feel like you’re betting against your commitment to your partner, but that doesn’t have to be the case. Learn how a prenup can protect your finances and when signing one is especially beneficial.
What Is a Prenup?
Divorce is probably the last thing on your mind before walking down the aisle, but thousands of people end their marriages every year. If you go through a divorce, you will have to divide your assets according to state law.
A prenup is an agreement you sign before marriage that helps you and your spouse agree on what should happen to premarital and marital assets in the event of a divorce.
Who Needs One?
Anyone can benefit from a prenup. But they can be especially helpful if:
You or your partner have a significant amount of individual debt.
One partner earns a lot more than the other.
You or your soon-to-be spouse have children from a previous relationship.
One of you plans to become a stay-at-home parent.
There is the potential that you or your partner will receive a large inheritance.
The Pros and Cons
Prenups help couples communicate about finances — an important topic even if you never get divorced. If you ever were to separate, a prenup can make the process more straightforward and less expensive.
On the downside, many couples feel that a prenup runs counter to the idea of lifelong marriage. Additionally, a prenup could favor one spouse. Ideally, each person should have ample opportunity to negotiate the agreement’s terms to ensure it is fair for both of you.
Prenups can be an important part of preserving your wealth. Get in touch if you want to learn more ways to build and protect your financial future.