Not everyone needs a prenuptial agreement, but a lot of people benefit from these legal instruments. Anyone who owns a business, holds real estate assets, has children from a previous marriage, or has significant assets should seriously consider entering a prenup before marriage. And contrary to popular belief, these agreements don’t only protect the wealthier spouse, but they look out for the best interests of the less wealthy spouse as well.
When people think of prenups, they tend to think they’re only meant for billionaires, actors and singers, but that’s not the case. They’re relevant to all high net worth individuals, business owners, and individuals with children from a previous relationship.
What Are the Benefits of a Prenup?
Why do wealthy individuals (and their brides and grooms to be) find peace of mind in prenups? Because, they offer them clarity on what will happen to their finances in the event of a divorce. Instead of fearing a costly divorce battle that leaves their hard-earned assets vulnerable, they know exactly what will happen to their finances if their marriage doesn’t work out as anticipated.
What a prenuptial agreement can do:
- Keep a spouse’s income earned during the marriage separate.
- Declare that separate assets owned before the marriage shall remain separate upon a divorce.
- Specify the amount and duration of alimony.
- State who gets to keep what (art, furniture, pets, automobiles, etc.) in the event of a divorce.
- Specify exactly how marital assets will be divided in the event of a divorce.
- State that a business asset will be treated as a non-marital asset and owned by one spouse alone. And much more.
While the terms set forth in a prenuptial agreement can vary widely, they cannot leave one spouse penniless, nor can they be unfair. Lastly, prenups cannot control child custody or child support matters. If a couple cannot agree on child-related matters, only a family law Judge has the authority to make child custody and support decisions.
Will you benefit by drawing up a prenuptial or postnuptial agreement? To learn more, contact Morneau Law for a consultation.