Are prenuptial marriage agreements practical solutions to dealing with the problematic topic of finances in a marriage?
More and more couples are signing prenuptial marriage agreements before they marry. These are not just couples dealing with financial inequality, or couples who have a lot of wealth. These are couples that want to put all their financial cards on the table before they walk down the aisle. A prenuptial agreement is a private contract entered into by two parties before a marriage or civil union takes place. It may also be called a premarital agreement, an ante nuptial agreement, a marriage contract or a pre nup for short. Its purpose is to settle financial matters in advance in the event of either a divorce or death. While a prenuptial agreement may seem unromantic, some experts say it’s just smart financial planning. It ensures that your financial matters are handled according to your wishes rather than the state’s decision.
Determining whether a pre nup is right for you, however, is a very personal decision that should only come after a serious discussion with your significant other. A pre nup is also a good idea if the newly married couples have a large difference in age or financial status. The spouse with the majority of the assets will want to protect those assets and control their distribution, while the person with fewer assets will want ensure receipt of some of the marital property in case the marriage ends due to divorce or death. If you don’t make a prenuptial agreement, your state’s laws determine who owns the property that you acquire during your marriage, as well as what happens to that property at divorce or death. State law may even have a say in what happens to some of the property you owned before you were married. Under the law, marriage is considered to be a contract between the marrying couple, with that contract comes certain automatic property rights for each spouse. If these laws — called marital property, divorce, and probate laws — aren’t to your liking, it’s time to think about a pre nup, which in most cases lets you decide for yourselves how your property should be handled. Just because courts still look carefully at pre nups, it is important that you negotiate and write up your agreement in a way that is clear, understandable, and legally correct.