The Finance Blogger

Prenuptial Agreements

Prenuptial AgreementsA Definition of Prenuptial Agreements

A prenuptial agreement, or premarital agreement, is commonly abbreviated to prenup. It is a contract entered into prior to marriage, civil union or any other agreement. Prior to the main agreement by the people intending to marry or contract with each other. Prenuptial agreements can vary widely. But typically include provisions for division of property and spousal support in the event of divorce or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce. This could be based on the grounds of adultery. Further conditions of guardianship may be included as well.

Prenuptial Agreements – The Real World

Whether you have an agreement or not, it really depends on how the two parties deal with each other when it comes to separating. If both can handle things in a mature and fair manner then there are usually few problems. On the other hand sometimes one or both feel they have been slighted in some manner. They may feel taken advantage of¬† or want to gain as much in the way of assets as possible. A prenuptial agreement may help you. The emphasis is on “may”, since it really depends on the laws in your state or province. In addition the opinion of the judge and the circumstances around the reason for the divorce. Some will argue that it also depends on dependents. Also other factors such as how well the prenuptial agreement was written in the first place.

How Do you Know if You Need a Prenuptial Agreement?

The short answer is that you don’t know. If you both go into the marriage with basically nothing, you probably do not need a prenup. Since local laws are going to supersede anything that might have been agreed to anyway. On the other hand or other extreme, if you both go into the marriage with huge assets, then maybe you should arrange to have a prenuptial agreement drawn up to at least clarify what you each bring to the table. Gains in assets after the marriage have taken place are fair game.

While these extreme situations are pretty clear, the folks in between with some assets or perhaps one party having a great deal and the other very limited in terms of assets are the ones that sometimes suffer. We have all read about the Hollywood types or the multi millionaires  being taken for a s significant share of their wealth during a breakup. Athletes seem to have this occur to them on a fairly regular basis. Somehow you need to protect yourself from these situations even if it is to limit the damage to what might be considered fair at the time.

Common Sense

It seems from all of the news we have read that the common sense thing to do if you have significant assets is that you should take the time to draw up a prenuptial agreement just in case. There are several reasons for making this statement. First you cannot predict what will happen these days with your marriage when over 50% in failure. Second, it is the same as taking out insurance. You hope that you will never need to cash in on your insurance policy, but you are really glad that you have a policy if you have an accident etc. Prenuptial agreements can be similar.

Discussing prenuptial agreements with your spouse !

For some this can be a delicate situation. If there is some resistance and you are bringing all of the assets to the relationship, perhaps you should be a bit wary. Granted, discussing a prenuptial agreement as part of a marriage may take some of the romance out of the wedding and the relationship, it is really a business decision that can impact your personal and business wealth. Don’t allow emotions to get in the way of making these kinds of decisions.

We are obviously not lawyers, just writers looking at this subject from a common sense perspective. If you feel that you may need a prenuptial agreement, talk to a competent lawyer in this field and make a decision regarding your need to have a prenuptial agreement prior to your marriage.

Comments are welcome as long as they are deemed to help our readers understand this complex and emotional subject.

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