What Do Prenuptial Agreements Protect?

With one in three marriages ending in divorce, many are choosing to negotiate and sign prenuptial agreements. A prenuptial agreement is akin to a business contract between two parties; matters such as division (should death or divorce occur) of financial and personal assets, custody of children, division of property are all addressed within the document. Those who consider a prenuptial agreement may own a business, have substantial assets including inheritance, have children from previous relationship, and/or may have the potential to see income increase over the duration of the marriage (i.e. a doctor or entrepreneur).

A prenuptial agreement, where properly negotiated, can protect:

• Retirement or education funds that either party may have accumulated before marriage
• Division of property that either party owns at time of marriage
• Property interests of any children from previous relationships
• Obligations of spousal support should marriage dissolve
• Direction of education and religious instruction of children borne from marriage
• Finances of each party
• Against obligation to pay the other party's debts
• Inheritance
• Ownership rights in life insurance or disability policies

Prenuptial agreements can not be used to:

• Determine custodial arrangements of children
• Define matters of support of children
• Determine who has the right to marital home, or the right to sell same if marriage dissolves
• Define any personal matters such as relationships with family

If you intend on entering into a prenuptial agreement, do so as early as possible prior to marriage - this insures that neither party is surprised by the nature of the agreement. Hopefully you and your spouse will live happily ever after...