A pre-nuptial agreement is a private contract between the parties entered into prior to their marriage that outlines how assets and debts will be handled if the parties subsequently divorce. A basic and straight-forward pre-nuptial agreement could provide that each party retains anything they came into the marriage with as well as anything they acquire in their own name and that anything acquired jointly during the marriage will be divided equally or pursuant to their jurisdiction's divorce laws. A pre-nuptial agreement can also be much more specific and detailed in how it addresses pre-marital and marital property, regardless of how it's titled. An agreement may also address support for a spouse in addition to division of assets. For example, an agreement could provide for an increasing amount of support to a spouse based on the number of years married or number of children produced. It could also act as a waiver to any future support such that neither party could subsequently request any form of spousal support.
As a wedding day approaches, most couples are consumed with thoughts of dresses, flowers, music, food, fun, and love. The last thing anyone wants to think about, much less talk about, is how assets will be divided in the event of divorce! However, this is a conversation that many couples need to have. Marriage is full of tricky discussions - it's ok to start practicing that skill now.
Gone are the days when prenuptial agreements are viewed as contracts on a marriage or a guarantee on divorce. While some religions and cultures still do frown upon them, they can be a great way to talk about finances and strengthen your marriage with clear expectations. If you have children from a previous relationship and significant assets to protect, a prenup can also make everyone feel more comfortable.
If you are getting married and the idea of a prenuptial agreement puts a distaste in your mouth or that of your spouse, but you are still concerned about losing your premarital assets, there are a few things that you should and should not do if you get married without a prenuptial. Never add your spouse's name to the house or bank account you had prior to marriage unless you are willing to gift this asset to the marriage. This is not to say that the house you own prior to your marriage will not be distributed in a divorce, but you can minimize the amount by keeping it separately deeded. The equity that you have when you get married will remain your asset should you get divorced. You should know what this value is when you get married by having the house appraised and keeping documentation on your mortgage balance at the time of your marriage. Without a prenuptial agreement, the increase in value during the marriage will become marital, whether or not you add your spouse to the deed or title of your account. If you have a mortgage and pay it off during the marriage, you will be accumulating marital equity even if the house does not go up value. In addition, if you have any bank accounts, you will want to keep the funds that you had going into the marriage in your separate name.
If you are getting married, you may want to consider a prenuptial agreement before you tie the knot. A prenuptial agreement is not necessary in every situation, but is very useful to avoid conflict in certain situations. It is not always just for divorce. You may want to use it to allow you to decide how your assets will be distributed in the event of death rather than have your spouse be entitled to their elective share.
Given the statistics on the likelihood of divorce, many couples are opting to enter into pre-nuptial agreements to protect their rights in the event of a divorce. A pre-nuptial agreement is a private contract between the parties entered into prior to their marriage that outlines how assets and debts will be handled if the parties subsequently divorce. A basic and straight-forward pre-nuptial agreement would provide that each party retains anything they acquire in their own name and that anything marital or acquired jointly will be divided based on the divorce laws. A pre-nuptial agreement may also provide for an increasing amount of support to a spouse based on the number of years married or number of children produced. Alternatively, one spouse may be required to pay support as a punishment if they commit adultery during the marriage.