Do You Need a Prenuptial Agreement?
In the past, prenuptial agreements were common only with very wealthy individuals. Most couples married at a young age with little in the way of assets and worked together to build their finances. But times have changed. People get married later in life after accumulating substantial assets or obtaining postgraduate degrees that will help them earn more in their careers. Second marriages are also more common, so there is more concern with protecting children from previous marriages. Thus, it is now more common for couples to sign prenuptial agreements.
A prenuptial agreement details what will happen in the event of divorce or the death of either party. It spells out how assets currently owned and acquired in the future will be distributed. While you may think this will be handled in your will, a will doesn’t apply when you divorce, and most states allow a spouse to override the terms of a will and inherit a statutory percentage of the estate. Typically, a spouse cannot override the terms of a prenuptial agreement.
If you married without a prenuptial agreement, you can always use a postnuptial agreement. It is basically the same thing as a prenuptial agreement, but is signed after marriage. Keep these points in mind:
- It is important to discuss all financial information. You and your future spouse should detail all assets, debts, and income, so you can plan appropriately for their distribution. Also consider how you want to distribute assets acquired during the marriage.
- Consider other topics to include. You can also include things like who will be responsible for caring for children, how children will be raised, and other lifestyle issuers.
- Sign the prenuptial agreement in advance of your wedding day. To ensure a spouse doesn’t later claim that the agreement was signed under duress, consider signing the agreement at least two or three months before your wedding.
Copyright © Integrated Concepts 2012. Some articles in this newsletter were prepared by Integrated Concepts, a separate, nonaffiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed, but should not be regarded as a complete analysis of these subjects. The appropriate professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.