Although historically, prenuptial agreements have been thought they are best for higher-income couples, they are actually beneficial to couples of all income brackets. Another issue that makes many couples hesitate to look into getting a prenup is that they believe they are unromantic, or may even make a couple more likely to get divorced. In fact, the opposite is true. Prenups force couples to have challenging conversations regarding finances, assets, property ownership, children, and other issues prior to the marriage. Studies have found that because of this couples with a prenuptial agreement in place actually have lower divorce rates than those who do not.
A prenuptial agreement is a contract between two people that is entered into and sign before marriage. This document details what will happen in the event of divorce, particularly regarding the couples’ financial affairs. The only requirement to creating a prenup is a desire to spell out what will happen in the event of a divorce.
Individuals with significant assets, who are business owners, and those who have children from previous relationships may find prenuptial agreements beneficial. Even those with mid-level incomes can benefit from having a prenup in place. There are many reasons a couple might consider a prenup, which will be discussed below.
The best time for a couple to begin thinking and discussing a prenuptial agreement is as soon as they begin to seriously consider marriage. Couples should discuss the issues and topics openly, honestly, and as soon as possible, to allow enough time before the wedding to agree on the terms.
Most people think of prenups as having to do with finances, and while they do play a large role in most prenuptial agreements, there is more to them. Prenups can include a variety of provisions, including:
Keep in mind that state laws vary regarding prenuptial agreements, so there may be issues that specifically can or cannot be included depending on where you live.
When drawn up and executed correctly, prenuptial agreements are legally binding and in most cases will be upheld in court. However there are some instances, such as signing under duress, where a prenup can be found invalid in court.
Here are some additional reasons a prenup may be found invalid including:
It's also important to note that a prenuptial agreement does not take the place of an estate plan. A prenup is not meant to serve as a will or any other estate planning document. Even if a couple has a prenuptial agreement in place, each spouse should create a legally binding will or other estate planning documents to protect their assets and ensure they are distributed according to their wishes.
**Disclaimer: The content used in the article is not to be used as legal advice and is for illustration and general informational purposes only. If you have questions about your particular situation, please contact us to schedule a consultation with one of our experienced attorneys.