If you’re engaged, it’s probably a good idea to add a prenuptial agreement, commonly known as a prenup, to your wedding planning. Prenups are valuable for all couples, not only those entering marriage with a lot of assets. And contrary to popular opinion, a prenup is not going to increase your likelihood of divorce. In fact, communication and money are two of the top three reasons people seek divorce, so a prenup can actually strengthen your relationship by helping you begin addressing these matters prior to your marriage.
In the most basic sense, a prenup is a contract that lists all the property and debt of each spouse-to-be, and the subsequent property rights in the event of a divorce. More specifically, a prenup can address questions such as the following:
- Who owns and/or can use certain property after divorce?
- How will assets be divided after divorce?
- How will debt be allocated after divorce?
- How will alimony be addressed after divorce?
- Which state’s laws will apply to the prenup if there is a disagreement?
In short, a prenup is one way to protect individual and joint assets, which can facilitate other financial goals even if the marriage does not last. If you were married previously and are entering a new union, prenups can also help answer questions about your assets relative to your children from the previous marriage. And if you’re already married, a post-nuptial agreement is still possible. This may even be beneficial to your marriage, particularly if it helps address the money and communication challenges so many couples face.