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Why You May Need A Prenuptial Agreement

There are cases where a prenuptial Agreement is necessarySome Reasons Why You May Need a Prenuptial Agreement

Now here’s a topic that is so popular, every couple considering marriage can’t wait to discuss it. Just kidding, had to make sure that I had your attention. A Prenuptial Agreement, or a prenup as it is more widely known, is simply a document drawn up by an attorney that will specify how a couple wants to divide any assets they bring into a marriage, or acquire in the marriage, if they ever divorce. This isn’t one of the more romantic type of gestures, but sometimes is necessary.

Attorneys that specialize in this type of law say that a prenup can benefit anyone, even those individuals that enter a marriage with very little assets. Is this true? Or are these matrimonial attorneys just looking for more business? Read on and let’s find out.

The first reason is that the couple will more than likely acquire various assets during the marriage, and even though they may be a young couple just beginning their careers, matrimonial law varies from state to state. The temperament and expertise of judges varies as well, and they don’t want some unknown judge deciding who gets what. Lawyers say that no two divorces are alike. This makes sense.

Another reason is, and as an example, sometimes the husband or the wife may bring high student loans into the marriage. This type of debt is “individually owned”; however, a divorce court or judge can consider it to be joint. This can be particularly true using an example of one spouse that graduated from medical school where the average student loans can total $200,000.00 or more. Having a judge make that debt joint could be a problem for the other spouse.

A divorce is stressful in itself for both spouses, and by planning in advance how the assets, earnings, and debt will be divided, can alleviate much of the added stress when they separate. Most couples today begin marriage on equal terms, that is, both have a job and are embarking on a career. This is true as well.

Okay, here are a few more reasons that perhaps a prenuptial agreement might be worth considering. These could apply to a couple married for many years or one just planning their wedding. If the couple has children, one of the spouses usually puts his/her career on hold so that a proper home is maintained for the child. That spouse’s earnings power is severely limited because they have placed their career on the back burner, so to speak.

Most matrimonial attorneys will ask the couple their opinion of alimony if the marriage ends in divorce, and on occasion, one spouse is quite surprised when they hear their partner’s comments. If that spouse doesn’t want to pay alimony, then that may change your mind about staying at home, and instead you will continue to work.

There are times when a prenup can be created after the couple is married. It’s called a post nuptial agreement, and there are times when this type is more difficult to enforce. These types are done when both spouses are bringing “something to the table”, and they bargain for exchange. An example would be one of the spouses agreeing to sign a post nuptial agreeing to permit the other spouse to purchase some other asset acquired in the marriage.

If one of the spouses agrees to stay at home to provide a home for the children, then a post nuptial agreement could be done to protect that spouse financially, since their career has been placed on hold.

You’re probably wondering what the “average”, or maybe a better word, “typical” prenup costs. It’s about half of the cost of the average engagement ring, or in the area of $2,500.00. This is also what the average cost to prepare an estate plan is.

If you do a search on the internet, you’ll find some of the do it yourself sites where you can also prepare a prenup. This is one area where you must exercise extreme care because just about every state has their own legal requirements. Many of these self prepared documents don’t stand up in court and are usually

To properly prepare a prenup, each spouse should be represented by their own attorney in order to avoid an ethical conflict of interest. If the same attorney represented both spouses, the prenup would be invalid in that case.  If you plan to have a prenup, don’t wait until the eleventh hour, as it will most certainly create additional stress on both parties.

Even worse, if you really need a prenup, don’t neglect to get it like the recent movie star who married without one. Usually, a movie star or some other wealthy individual will be advised by their financial adviser to get one.

No one marries with plans to get divorced, but it happens. In today’s society, unfortunately, it happens quite frequently. Not having a prenup can be compared to not having liability insurance on your car.

There are some states that have community property laws, which basically means that a couple’s assets are divided equally no matter what. Texas and California happen to operate under these laws making a prenup extremely important if the couple’s wishes are not a 50/50 split. A prenup will take precedence over these laws and will ensure that the couple’s wishes are carried out.

You can compare a prenup to a life insurance policy. No one wants to considers the worst case scenario, but when it happens, and you have the insurance, the stress is a lot less. The prenup is the same way, you don’t plan for a divorce to happen, but if it does, then your stress is reduced as well.

Most couples associate a prenup with high income individuals; however, as you’ve seen in this article, they can be important and relevant to many others. This is true especially in high debt situations, or one spouse putting their career on hold to care for the children. Are you convinced yet? Do you think you should have created one?

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About Gust Lenglet

An accountant and tax preparer by profession, Gust's true passion lies in his blog titled "How To Manage Your Money". Through this venue, he not only tries to teach individuals about budgeting and money management, but he writes the majority of the articles as well.

Comments

  1. If you have any family whatsoever from previous engagements, then a prenup is one of the most important things you can get.

  2. I was wondering where you were going with the first sentence, but you did indeed draw my attention to the post! My sister had a bad experience that this could have helped with as her husband had massive debts, unbeknown to her, and he bailed leaving her to pay the debt. Eventually she lost everything because of it. It is essential to have a contract drawn up to protect everyone.

    Mandy
    Mandy Allen recently posted..What’s New For 2013?My Profile

  3. I so wish I had this information a few years ago. Well, actually I was in love and as we all know, love it blind so I probably would have gotten married without a prenup. Now though, I wouldn’t consider remarrying without one and advise anyone willing to listen to do the same. If you are the party bringing the bigger pie to the family unit once you are married, and he or she truly loves you for you, a prenup isn’t going to be an issue. If your asking for one causes an argument, run… because it isn’t you your potential spouse is interested in at all.

  4. While I have no experience with pre-nups, and know very little about them, in today’s day & age, I would agree that they are important. My reason for knowing so little about them, and not feeling like I need one is because I grew up in a world where divorce is never an option. (I grew up as an Old-Order Mennonite, living Christian, Biblical values.) However, there are few others who could say the same, so as I said before, I would say that, yes, a pre-nup sounds like a good idea.
    Ruth Martin recently posted..Tips for Buying and Selling Successfully on FiverrMy Profile

  5. Guy Wainsworth says:

    My father and mother entered into a prenuptial agreement when they married, and I have no intention of doing otherwise myself. However, in today’s liberalized times marriage isn’t the institution it once was and living ‘common law’ is a much more common arrangement between couples, even couples that have children together.

    What most people do not know is that “common law” relationships can result in the same financial burden as divorce. Also, most people think a prenup is only applicable to marriage. Not so! If a couple live together for an extended period of time, use their joint incomes to pay for household expenses, have a joint bank account, take out a car loan together, and so on, breaking up can be a costly affair for one of the two. A ‘common law’ relationship can, and often do, end up in court and ‘common property’ is treated exactly the same as it would be in a divorce, split evenly, or granted to one party or the other, depending on the extenuating circumstances that resulted in the break up. So a prenuptial agreement needs to be a consideration for any form of cohabitation.

  6. I have been happily married for a long, long time, and we don’t have a prenup. But I have seen so many people throughout my life who have been in tons of distress when unfortunate things, such as divorce happen.
    To be honest, I very often see the woman get everything, and it doesn’t seem to really matter who did what or what happned. I do know a few divorced men personally, who I figure just left everything go rather then cause a big scene, and courtroom battle.
    (Btw, I am a bartender lol, so no, I don’t run around chasing divorced men, lol!) But, I do meet lots of them, and hear all of the sad stories, and sometimes, I get the chance to meet the ex wives!
    Really though, this is very important, especially when somebody is bringing much more to the marriage then the other.
    I also think it’s a sad thing, since this is supposed to be the one person you can trust with your life, and it kind of takes from the whole, “love” part to me.
    But, hey, people nowadays are a little scary!

  7. This really important information especially about debt. I didn’t realize that debt can be kept individual within a marriage. That is essential to my situation because my fiance has a lot of school debt that he is carrying so for those exact same reasons I’ve been wondering what would happen. This is very good to know.

  8. Ruby Singer says:

    The only thing that a lot of people in the middle class often think about when their soon to be spouse says that they want a pre-nup is, they obviously think that we are going to end up in a divorce. People don’t realize that this can be used to everyone’s advantage and even with a pre-nup this doesn’t mean that you won’t qualify for alimony.

  9. JTomlinson
    Twitter:
    says:

    Lol, I can’t imagine being engaged and each having an attorney to arrange a prenup in preparation for divorce, when they’re not even married yet. I think if it’s rich people or business owners getting married, then yes, a prenup is a good thing to have, but regular people, not so much. Thanks for the article though, it’s definitely something to think about.

  10. People that say possessing a prenup is setting the spousal relationship game failing are full of this. That is like claiming purchasing existence insurance coverage is setting you up for early death. Look at the prenup like insurance. Need to the unexpected occur, you have protected on your own versus the possible sadness of an awful, contentious divorce where often the only champions are the legal professionals

  11. Prenuptial can secure partners from each other’s financial obligations. They could also define exactly how one partner’s asset can be passed on to children from a previous marital relationship. Moreover, a prenuptial arrangement could show who among the parties is to receive spousal support.
    Jallen1128 recently posted..Sexual Harassment Lawyer in Richmond, Ca – Overview of Labor law on Employee Sexual Harassment in the Workplace by Sexual Harassment Attorney in Richmond, CaliforniaMy Profile

  12. Since the house has been taken away and put up for auction, it stands to reason that the homeowners wouldn’t be a factor any longer, but this is often not the case. Millions of people who have been through a break-up feel exactly what you are feeling right now. But, how to decide what loan suits the situation best. It is obvious that a person seeks different kinds of sources to avail cash for urgent needs. The documentation of payees and the account holders by U. The AICPA (actually, it predecessor, which became the AICPA) was the first to try to develop standards for the accounting profession in the U.S.

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  14. Donald Quixote from Lutz Law says:

    The idea of divorce is never a discussion newly weds want to discuss, but I think having a prenup agreement is very beneficial in case anything does happen. People aren’t always what they seem, it’s good to be prepared!
    Donald Quixote recently posted..Common Issues in Divorce CasesMy Profile

    • Discussing a prenup can be a highly sensitive topic for most couples contemplating marriage. Often, however, it can be helpful, especially if one spouse is bringing a lot of debt into the marriage, such as high student loans or credit cards.
      Gust Lenglet recently posted..Debt Management TipsMy Profile

  15. Thank you for explaining about prenuptial agreements. It’s good to know what a pre-married couple’s rights are to the assets they bring into marriage, in case they get a divorce. I should’ve told half of my aunts and uncles about this sooner!

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