What is a Prenuptial Agreement?
A prenuptial agreement is a written contract between two people who are about to marry. It sets out the terms of possession of assets, management of future earnings, and control or division of property of each person if the marriage should be later dissolved. Prenuptial agreements are often used in the case of divorce, however, they are also helpful when one spouse dies. They can help resolve issues regarding property and distribution of marital assets. Although prenuptial agreements are becoming more common, many couples may be hesitant to create one. When deciding whether to use a prenuptial agreement, it is best to consider the pros and cons associated with them.
Advantages of prenuptial agreements
Protects pre-marital assets. Most prenuptial agreements protect all premarital assets. Assets that are jointly acquired during the marriage are typically shared equally.
Protects the financial stability of your children. Without a prenuptial agreement your spouse may receive assets you intended your children to have.
Reduces future conflict. Signing a prenuptial agreement eliminates the possibility of future conflict in the case of divorce, as it states how issues are to be handled. It can also help to reduce the amount of time that it takes to settle up the divorce.
Assigns debts. Prenuptial agreements can determine how liability for debt will be distributed between the parties to avoid both spouses sharing debt liability.
Makes divorce settlements easier. A prenuptial agreement can help avoid extended court proceedings, which result in the time of expensive divorce attorneys, since the expectations by both partners is clear.
Disadvantages of prenuptial agreements
Sense of distrust. Many feel that even bringing up the idea of a prenuptial agreement means there is a lack of trust. Some feel that a prenuptial agreement leaves the couple more open to the possibility of divorce.
May be unnecessary. State laws sometimes cover a lot of the issues that are addressed in a prenuptial agreement. Most states also don’t allow certain issues to be resolved through a prenuptial agreement. For example, child support matters have to be resolved through court mechanisms.
Can be a trap. Prenuptial agreements can be a trap for some people. In certain cases they can be as a tool to control the partner that is coming into the relationship with less assets.
Cannot include child support issues. A prenuptial agreement cannot include child support or child custody issues. The court has the final say in calculating child support. The court also determines child support based on several factors. A court would never uphold a provision o f a prenuptial agreement that dealt with child support.
Can create burdens. Sometimes circumstances change and people cannot predict what will occur in their lives and marriage. It can be difficult to predict how potential issues should be handled in the future, and what may seem like a compromise at first can seem more burdensome later on.