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The Importance of a Prenuptial Marriage Agreement

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Many people focus on romance when they get engaged with the idea that they will only part upon death. They do not consider signing a prenuptial marriage agreement or a prenup since they think the document is a sign of the end of their romance.

Splitting up is far from their minds, so they do not see the importance of signing a prenup before they exchange their vows. But a prenup offers several benefits as it allows the marriage to stay on track. Here are the things that people should understand about these agreements.

Prenuptial Marriage Agreements

Before going through the importance of a prenup, it’s best to define what it is. Prenuptial marriage agreements are legally signed agreements showing the way couples will deal with their assets and property rights or the financial aspect of their marriage. The agreement can serve as a guide for the divorce lawyer to dealing with a separation. It makes it easier for couples to deal with the financial aspects of a split in case it happens.

Even though a split is far from the minds of couples who got engaged recently, it is a good idea to have one. Some people may not have a prenup since they do not consider their current assets to make the agreement worthwhile. But couples should remember that a prenup is not dividing up the assets since they do not trust each other. They should look at it as a basis for a strategic financial plan that facilitates making decisions in the future.

While it is understandable for couples who have significant assets to sign a prenup, more couples who are just starting in life are also entering into these agreements. The prenup allows them to protect any assets they accumulate individually and takes away any uncertainty in the financial aspect of their partnership.

Even though prenups are financially motivated, they can also encompass items that have sentimental value to an individual. These include collectibles and family heirlooms. It can also be limited to one asset, which is typically the family home.

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Advantages of a Prenuptial Agreement

A prenuptial marriage agreement offers several advantages for both sides. It reduces the obligation a person has for the debt of the spouse after they separate. It also ensures the children from previous marriages receive assets when a person passes away. Aside from personal assets, the agreement also protects business assets by limiting the control of a former spouse on an expanding business.

Disadvantages of a Prenuptial Agreement

While there are advantages of a prenuptial marriage agreement, there are also some disadvantages. For instance, when a spouse does not disclose all the assets, a judge can deem the prenup invalid. A person will also not be entitled to share the professional success of the partner unless it was indicated on the prenup. Some partners may agree to terms that were not in their best interest since they signed the prenup when the romance was still there. Both spouses will also have to hire their attorneys, which means they pay their legal fees individually.

Things to Consider in a Prenuptial Agreement

Before a couple enters into a prenup, they should discuss the agreement early. They should not wait until they are ready to get married. Both sides should also be honest and reveal their feelings about the agreement. They should also avoid issues by showing all their assets.

When working on the prenup, both sides should have their attorneys so they’ll be well represented during the discussion. They can also ask their attorneys to supply affidavits of independent counsel that they can include in the prenup agreement.

Issues with Prenuptial Agreements

Both sides should also consider that prenups are not limited to their assets since they also involve their individual debts. Since loans and debts can become complicated when couples separate, they need to specify the debt or loans remain separate from the couple. For instance, the prenup can consider student debt as a separate debt even if it came after the couple got married.

If the couple has different views with the prenup, they can ask for help from a professional mediator to iron out any issues they have. They can also opt to create a revocable trust to protect their assets before the marriage. Keeping their properties under separate names is also an option, along with having separate checking accounts. They should also make sure to keep detailed records of their assets and accounts before they get married.

Many people may consider a prenuptial marriage agreement as a sign that the marriage will not last. But couples can also use it as a foundation for their partnership in their journey as lifelong partners.

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