An increasing number of modern couples these days go into a prenuptial agreement before tying the knot. Contrary to the old stereotype of people having a wrong perception towards it, it’s actually helpful and smart for couples to arrange a prenuptial agreement to stay prepared and ready for any events which may need it. A prenuptial agreement is a way for both parties to distribute assets and obligations fairly and legally.
The first thing a couple needs to do when deciding to participate in this path is to disclose all their financial status, such as assets and liabilities. When prenuptial agreements are effectively arranged, the spouses will use them in conflicts, at least saving them time and money without having to present their cases in court.
When you and your partner are planning to get a prenuptial agreement from a reliable family law firm, here are some vital things you must include:
1. Limiting Debt Liability
Although only one spouse is obligated to make credit payments, creditors can still claim marital assets. For this reason, a prenuptial agreement becomes handy in protecting the party that lacks financial credits. The debt-free spouse won’t need to assume the liabilities of their partner.
Your spouse may accumulate debts before and during the marriage. During a divorce, both of you might be responsible for paying back this debt. The courts may be forced to share these debts evenly if there’s no prenuptial agreement in place. And of course, this won’t sit right with the person who didn’t take part in borrowing the money.
When the couple has debts to repay, this agreement can help keep obligations apart and keep creditors from claiming properties as payment. If a couple owns many real estate or assets, the prenuptial agreement should outline the debt-recovery plan and limit liabilities. When it’s all said and done, couples often agree that getting a prenup was the right decision.
2. Differences Between Individual And Marital Properties
The couple’s marital assets comprise assets acquired throughout their marriage. In contrast, separate assets include assets acquired before or after getting married and assets given as gifts or inherited by the couple. It’s essential to know the differences between them clearly so there won’t be conflicts about who owns what later on. It’s still separate property as long as you can prove that you owned it prior to marriage. The division of marital property and the treatment of individual property are up to you and your spouse. So, have it included in your prenup agreement.
3. Dependent Children
A prenuptial agreement allows both parties to determine what their children will receive in the event of a divorce or separation. All children will be accounted for and included as if they were together or from their previous marriage. Although guardianship, visitation rights, and child support payments cannot be specified in a prenuptial agreement, the contract can usually describe how the assets and property will be passed on to the children. Therefore, if it seems necessary to divide assets and property in some way, such as gifting certain property to your children, you can define these terms in the prenuptial agreement.
4. Family Property
In some cases, prenuptial agreements are also used to protect your properties, ensuring it doesn’t pass to the spouse’s family after a divorce. If properly drafted in the agreement, an inheritance agreement can help establish and protect the inheritance rights of your heirs. Talk this out with your partner and make sure that both of you agree on it.
5. Individual Spousal Responsibilities
Aside from a prenuptial agreement outlining who will get what at the end of the marriage, it should also state their obligations to each other and how you will tackle the modern child support system. Some more examples of roles being distributed include the following:
- Who will spend on the household expenses?
- How will the joint bank accounts be managed?
- How will disputes be solved?
- How will savings be distributed to both parties?
6. Estate Plan
Estate planning is most often associated with documents, the last will, and testaments. Prenuptial agreements are also crucial documents for estate planning. Prenuptial agreements can help avoid the mixing of separate assets with properties obtained during the marriage, as well as determining how your children will inherit your property.
As part of your will, you can decide what your partner receives as part of your estate plan. A prenuptial agreement can limit an heir’s inheritance when you are planning your estate. This situation is particularly good if they have other children from previous marriages.
Consider a prenuptial agreement for your financial future with your spouse. You can seek advice from a professional attorney or advisor who can provide insights and guidance about it. You both need to be aware of what the agreement can and cannot contain, so talk to each other openly and honestly. The primary purpose of a valid prenuptial agreement is to give you and your future spouse the peace of mind you need when you take your vows.