Prenuptial agreements are useful tools for defining specific financial and property division considerations in a marriage. A signed prenuptial agreement provides a sense of clarity and security for both partners. It also encourages discussion about important issues early in the relationship.
Prenuptial agreements can cover a variety of elements.
Financial assets and debts
A prenuptial agreement defines how a couple’s financial assets and debts get distributed or handled during the marriage as well as in the event of a divorce. This includes defining which assets remain individual property versus marital property.
Many prenuptial agreements define ownership rights and distribution methods for any properties acquired before or during the relationship. This includes valuable assets such as real estate and investments.
Whether you have children from a previous marriage or family heirlooms with sentimental and financial value, a prenuptial agreement ensures a fair and appropriate allocation of those assets in the event of divorce. This protects any inheritance you intend for your children as well as family heirlooms you inherited.
Whether one party in the relationship owns a business or you plan to start one together, a prenuptial agreement can define how you will handle the business in the event of a divorce, including any valuation or division.
Prenuptial agreements provide an opportunity for personalized agreements as well. For example, you might want to include pet considerations. Sometimes, a sunset clause provides a termination date for the agreement.
According to Marketwatch, approximately 15% of married couples surveyed in 2022 had signed a prenuptial agreement. When you understand the elements that these agreements cover, you can appreciate their value for any relationship.