A prenuptial agreement is a contract that helps couples establish ownership of specific assets and obligations upon their divorce or one partner’s death. Although not compulsory, creating one may be very helpful in certain situations, such as the following:
You have children from a previous marriage
A prenup often allows you to identify marital and separate assets. This makes it easy to create living trusts and implement other measures to ensure that your children may inherit your assets and protect their financial interests.
You own a business
A prenup can help you establish who manages or owns your business during and after your marriage. During a divorce, some spouses seek shares from the company their partner owns, citing that they contributed to its growth. In your prenup, you generally decide how much interest your partner may claim in your business or emphasize your ownership regardless of your spouse’s contributions.
Your partner has more debt
During a divorce, some spouses find out too late that they get a share of debts that solely benefit their partner. A prenup may help you avoid such an outcome in several ways, such as ensuring that your joint assets do not go to paying for your partner’s debts.
You have an inheritance
An inheritance usually holds personal value, especially if it comes from someone dear to you. Unfortunately, certain factors may turn your inheritance into marital property, possibly making it subject to property division during divorce. You may stress ownership of estates and other personal assets using your prenup.
A prenup can be a powerful tool but creating one can be complex. To ensure that your prenup is legally enforceable, it would help to seek the assistance of a family law attorney.