When it comes to preparing for a marriage, couples often focus on glamorous components. You put all your time, money and effort into the venue, food, clothing and the like. Although these are essential parts of your big day, there may be other important matters of your marriage you may overlook. One of them is getting a possible prenuptial agreement.
Prenups often gets a bad rap among couples because it implies a lack of trust; that one party may consider divorce down the line. But that’s not the primary purpose of the legal document — and many are starting to get it.
An Uptick of Premarital Agreements
A premarital agreement is an investment that protects everyone involved. This could be why many young people are getting one before they get hitched.
According to a survey by the American Academy of Matrimonial Lawyers, more than half of the attorneys stated that they saw a boost in prenuptial agreement requests from millennials in the past three years. This is a fivefold increase in agreements over the past two decades. Only two percent of the respondents said that they saw a decrease in requests among 18- to 34-year-olds.
This is because millennials are predisposed to protect their assets, according to the researchers. They’re so determined, in fact, that they choose to marry later in life to ensure they’re ready for the financial obligations that come with their commitment.
So how exactly do prenuptial agreements protect your assets, and why should you and your better half sign one?
What is a Prenuptial Agreement?
A prenuptial agreement, also known as a premarital agreement, is a contract created and agreed upon by two people before they get legally married. It shows all the assets like properties and cash that each party owns. It also includes the debts of both people. The contract specifies which properties that each party has rights to if their marriage ends or if one of them dies.
A variety of benefits can come from signing a prenup:
- Protection from Your Spouse’s Debt — If you or your spouse owes money to a bank or lender, a prenup protects both of you from acquiring each other’s debt. Inheriting your spouse’s debt, especially if they acquired it before your marriage is a rare instance. However, it’s still good to have that assurance.
- Make Probable Separation Less Messy — One of the most stressful parts of a possible divorce is the separation of each party’s assets. It can take hours of negotiations to settle on a deal that both people agree on. Sometimes, one gets more than the other, leading to arguments and bad blood beyond the proceedings. A prenup determines in advance how assets are going to be divided and whether or not one will receive alimony.
What are the Consequences of Skipping the Prenup?
If you don’t get a prenuptial agreement, you have to follow your state’s property law. These often state that the assets of the couple should be divided equally among both parties.
There are also states that consider a variety of factors to ensure that both parties get a fair, not just equal, share of the property. This is called “equitable distribution” and it provides a possibility that you or your spouse gets a greater percentage of your marital property.
Long story short, you and your spouse lose full control over your property when you skip your prenup. You’re essentially letting the court decide who gets which.
What Should You Consider When Signing a Premarital Agreement?
If you’ve decided on creating and signing a prenuptial agreement, consider a variety of factors. You want to ensure that you and your soon-to-be spouse will have fair, equitable representation.
- The terms — A prenuptial agreement is legally binding. You can’t just take it back. As such, you don’t want it to come from a template. Collaborate closely with your spouse when writing it.
- The lawyers — Apart from reviewing your contract with your better half, you should also have the text looked at by an attorney. They should be able to point out terms that you may want to reconsider and edit. They’ll also ensure that your contract is legally sound.
A prenup is best done before asking friends and family to “save the date.” This should give and your loved one time to talk about what you want, and whether you’ll meet some resistance or opposition to getting the contract done.
With a proper contract, both of you will rest easy knowing your assets are in your control, no matter what happens in the future.