Previously married parties, especially those who suffered through an extended and bitter divorce, may not be willing to marry again without knowing what their financial future holds. Oftentimes, a party will want to protect the financial interests of children from a previous marriage. Having a premarital agreement may prevent a fight over a will if a parent dies.
If one party has a habit of spending money, and the other party does not want to be responsible for debt incurred during the marriage, then a premarital agreement can help ensure that this does not happen, adds Roxas. If you own a business before the marriage, a prenuptial agreement can make sense as a divorce can destroy a family business. Plus, if you own a business with other people, their share of the business may also be impacted by your divorce.
A premarital agreement can allow the party to have full discretion over how to manage their business now and in the future. A prenup can quantify what that interest is, or it may allow the owning spouse to keep the business outright no matter what contributions were made during the marriage. The costs of business valuation and the burden of litigation over business issues can be expensive and time-consuming.
A prenup will save both money and time. The right to privacy is recognized in prenuptial agreements. There are often confidentiality clauses in prenuptial agreements to prevent, for example, social media exposure and tell-all books. Generational wealth and future inheritance are two reasons why someone may want a premarital agreement. That being said, a prenuptial agreement can, and often do, clarify if the inheritance of a party remains their non-marital property.
Experts answer the most frequently asked questions pertaining to prenups. As soon as possible as there are benefits to having frank conversations early when emotions are not running high. Most engaged couples keep a checklist of items that need to be completed prior to the big day—finalizing your prenuptial agreement should be on that list. The final draft of the prenup must be presented to the party whose attorney has not drafted the agreement at least seven days before the prenup is signed.
It must be shown the parties had the legal capacity to enter into a contract and that it was not entered into by fraud, duress, or undue influence. Many partners are uncomfortable addressing prenups out of fear they will do harm to their relationship or offend their future spouse.
By discussing expectations and differences about money before marriage, partners can learn to more effectively understand and support each other throughout the marriage. Finally, when proposing a prenup, remember the goal is not to have the same views but to come to a place of understanding, empathy, and agreement regarding how differences will be addressed. That way, you know exactly what you brought into the marriage and have proof should you ever need to divide everything up.
If you do decide to get a prenup, there are a few steps couples should take to make sure the agreement has the best possible chance of holding up if the marriage should end in divorce, Orman says.
But it pays to have frank conversations that go deeper than surface level. Talk with your future spouse not only about what accounts you currently have open and the balances of credit cards, but also about how you spend your money on a day-to-day basis and what your financial goals for the future are.
While it may be tempting to download one of the free, do-it-yourself forms available online, many times those don't stand up in court later on because you didn't meet all the legal requirements. And each partner should have their own private attorney, Orman says. You should also find attorneys that specialize in divorce or family law, rather than just general business.
Once the lawyers have drawn up the prenups for you, read them over carefully and make sure that you understand all of the details. Legal jargon can be challenging to understand, so take the time to talk it over with your lawyer and check out The Knot's helpful glossary of common terms. Both partners should also make changes to the prenup, Orman says. If you don't want to make any substantial updates, try re-wording a sentence.
The point is to prove you both have read and knowingly agreed to all the terms. That way, your spouse — or soon-to-be ex-spouse — will not be able to claim they never read it or that they didn't know what they were signing. Like marriage, you don't want to rush signing your prenup. Average cost of home insurance. How to shop for car insurance. Best savings accounts. Best checking accounts. Best CD rates. Best money-market accounts. Best high-yield savings accounts. Best bank account bonuses.
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