An increasingly large number of couples are signing prenuptial agreements to deal with their financial needs before they take a walk down the aisle.
A prenuptial agreement is a signed and notarized contract that details how a couple will handle the finances of their marriage. These “prenup” agreements have been around for quite a while, and continue to be popular today.
Prenuptial agreements are not just for those who have a lot of wealth or assets to their names. Prenups are also used to preserve rights to other family members, such as siblings or children from another marriage.
If you are undecided about whether or not a prenuptial agreement is for you and your future spouse, discuss this matter with each other and your legal council before you get married.
There are several valid reasons for having a prenuptial agreement before your wedding:
• It protects other family members if your wealth or assets are inherited or family-tied, as well as making sure that children from another marriage will be included in those ties.
• It faces your financial matters or expectations with your future spouse and puts them on the table before the vows are made.
• It eliminates potential future disputes over your finances and assets that may otherwise become a problem, such as businesses or real estate owned separately before the marriage.
• If including personal obligations upon your spouse, it protects the religious education or upbringing of your children.
However, there are also a few downsides to a prenuptial agreement as well:
• A spouse may challenge a premarital agreement on the basis that he or she did not enter into the agreement voluntarily because of duress or undue influence.
• It can be challenged in the case of fraud, violation of public policy, unfairness, or failure to disclose all assets.
• Some disappointed spouses believe it may be financially worthwhile to challenge the validity of the agreement to make it difficult to properly administer the estate, causing personal representatives to settle the challenges without regard to the merits of the case.
• Although it is impossible to prevent your future spouse from challenging your prenuptial agreement later on, it is still something that you both should talk about and at least have the option of having one if you choose.
It is best to discuss your financial matters with both your future spouse and legal counsel, regardless of whether you want a prenuptial agreement or not. Read more about hiring legal counsel.