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
- 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...