Everything you need to know about a prenup
- A prenup is a legal contract between future spouses outlining their finances and future arrangements in case of divorce
- Prenups help protect your assets in case a divorce happens
- Talk to your future spouse as soon as possible about whether or not you need a prenup.
As romantic as weddings can be, getting married is a legally-binding process that should be taken seriously. Once you’re married, you and your spouse share everything. That includes sharing debts, assets, and more. Given that 40 to 50 percent of marriages end in divorce in the United States, it may be wise to have a prenup signed before you wed.
What is a prenup?
A prenuptial agreement, also known as a prenup, is a legal contract signed by two future spouses before they get married. This type of document lists all the property, assets, and debts each person has. In addition, the prenup document will outline who has rights to properties or assets if the marriage ends in a divorce.
It’s unlikely you’ll be thinking about divorce after getting engaged. However, many marriages do end in divorce. For that reason, it’s important to have a prenup in place in case your marriage does end. Prenups may be especially useful for people who have a lot of money, property, or other assets in their name. Even business owners should consider signing a prenup before getting married.
If you don’t sign a prenup and you do get divorced, you’ll have much less control over assets and properties. This can be frustrating because, at one time, those were your assets and, post-divorce, those assets could be turned over to your spouse.
How to ask for a prenup
Depending on your relationship, your future spouse may not like the idea of signing a prenup before marriage. However, it’s better to be safe than sorry when it comes to your hard-earned money, property, and assets. Remember, you could potentially lose half or more of what you’ve earned without a prenup.
A good rule of thumb for bringing up a prenup is to start discussing this issue with your partner as soon as possible. If you have a lot of assets, you’ll likely want to bring this up while you’re still dating. After early discussions, you should have a general understanding of how your partner feels about prenups. If you can’t come to an agreement about a prenup before the engagement, you may need to evaluate your relationship.
However, it’s better to be safe than sorry when it comes to your hard-earned money, property, and assets. Remember, you could potentially lose half or more of what you’ve earned without a prenup.
You can also point out that prenups can benefit lower-earning spouses. In the prenup, all asset allocation will be explicitly laid out. By having a detailed prenup, you’ll save each other a lot of time, money, and energy. Without a prenup, you may have to spend much more on legal fees than you anticipated – an option that might not be feasible for the low-earning spouse.
Another way to ask for a prenup is to suggest creating the contract together. This way, both you and your spouse’s concerns are addressed thoroughly. This should make both of you much more comfortable about your finances. You can even find a neutral moderator to help you two reach agreements when drafting the prenup gets stressful. The most important thing to remember is to keep both of your interests in mind while creating the prenup.
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