Marriages don’t always have a good ending. Many couples who decide to divorce end up fighting about finances and properties. This is one of the reasons why you need to sign a prenuptial agreement.
What is a prenup? It is a binding contract that lets spouses determine how to divide assets and debts during a divorce. A prenup agreement is a legal document that spells out how your assets will get divided in court.
Why should you consider getting a prenup? We have compiled a few benefits that may change your mind about not getting one. Read on to learn the benefits of getting a prenup agreement.
Encourages a Pre-Marriage Conversation
Getting a prenup is one of the best ways to initiate a line of dialogue about finances and property. Being open and honest about your assets makes it easier to understand expectations. Even if you don’t draft it, it lets you keep open communication about your finances.
Having a well-planned and drafted prenup lets couples address common hurdles in divorce. It allows you to fast track your divorce by resolving issues about finances. Prenuptial agreements will bring quick resolutions, making it easy to avoid lengthy court battles.
Protects Your Property and Heirlooms
One of the most disputed areas of divorce is the division of assets and debts. It’s common to think that you share everything, but divorce sparks the conversation on who walks away with the property. Divorce judges first identify and categorize the property as separate or marital.
They divide the property equally, but a prenup will make the process easier. It will act as proof that your family heirlooms and property stays with you. The prenup will also state how they will handle the distribution of assets and who owns each property.
Guards You From Debt
You may not be aware that you will be marrying someone with a loan or credit card debt. When you get married, you may end up sharing your spouse’s obligations to pay their debt. Consider a prenuptial agreement to protect yourself from your spouse’s debts.
It also gets your partner talking about their financial issues. Signing a prenup means that when you file a divorce, the financial debts won’t get transferred. Consider getting a prenup agreement if you live in a state where debts and assets get considered to be joint by spouses.
Saves You Time and Money
Divorce requires a lot of your time and money. It can cost up to $15,000 per person for everything, from the court to outside help. The fees include the court costs, attorney fees, tax advisers, real estate appraisers, and child custody evaluators.
Most couples start on the same page, but fights tend to happen as the discussion progresses. This makes the discussion time longer and adds to the lawyer’s paycheck. A prenup is your savior for lower costs and easier conversations.
Guarantees a Fair Distribution of Assets
If you have a lot of assets compared to your partner, you’re at risk of losing a lot of your wealth when you divorce. A prenup will protect the wealth you’ve earned before your wedding. This is especially important if you’re older, about to retire, or retired.
When you can no longer work, it can be harder to earn back the money you gave during a divorce. With an agreement, you’re guaranteed that your assets will get fairly distributed.
Simplifies the Divorce Process
As stated earlier, divorcees tend to fight about assets in times of divorce. A prenup will prevent both parties from litigation or getting a lawsuit against the other party. It helps eliminate many issues since those issues were once discussed and agreed upon in advance.
Protects Your Business
If you own a business, you can write it down as your separate property. If a divorce happens, your business will be immune to distribution with no force to liquidate it. Those who own a business or studying for a business should sign a prenup.
Dividing and valuing a business can be an extra complicated step. It can also add to the costs of distributing and getting professional help.
Defines Your Marital Properties
Divorce processes follow the state or country law to divide property between spouses. In community property states, the courts will assume that all assets belong to both spouses. Then, the judge will distribute the value equally between both spouses.
In equal distribution states, the judges will evaluate each property. They will determine which property belongs to who and still divide it equally. A prenup helps couples avoid bitter and long arguments about their assets.
You can make it easier to discuss by defining what passes as marital property. The prenup agreement will also state how lawyers will divide the marital property. One of the best benefits of a prenup is the power of deciding what to share and separate.
Ensures Your Children
If you remarry, it’s good to think about how your new marriage will impact the lives of your children. A prenuptial agreement will allow you to designate certain assets to your kids. It ensures that to property rights you give to your children stay enforced and protected.
The prenup acts as a tool for your kids from past relationships if someone dies or the marriage fails. The children you have with your present marriage may get more than your other children with a prenup. Let your children live a comfortable life with the insurance that some of your property goes to them.
The Benefits of Getting a Prenup
When you tie the knot, it’s hard to know where your marriage will be in a few years. Getting a prenup will save your assets from going elsewhere. It will save you a lot of time and money to bring a prenup during a discussion about finances.
Save your finances, time, and personal property with a prenup! Are you looking to learn more about prenup agreements? Why not check out our other posts for more guides, tips, and tricks.