What is a prenup, and are you one of the people that needs one?
Oct 20, 2021
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A prenuptial agreement is a legal arrangement made before two people marry. A prenuptial agreement typically lists all of each individual's assets (as well as any debts) and specifies their private property after the marriage. A prenuptial agreement is also called an "antenuptial agreement" or, in more modern terminology, a "premarital agreement" in some states. As in "prenuptial contract," the word "contract" is sometimes used instead of "agreement."When a prenuptial agreement is required
Contrary to popular belief, prenups are not only for the wealthy. While prenuptial agreements are commonly utilised to preserve the assets of a wealthy fiancé, couples of modest means are increasingly using them for their own needs. Some people request a prenuptial agreement for the following reasons:
Separate property should be passed on to offspring from previous marriages. A married couple with children from past marriages can utilize a prenuptial agreement to specify what will happen to their assets when they die, enabling them to leave separate holdings to their kids while still caring for each other if necessary. Without a prenuptial agreement, a surviving spouse may be entitled to a considerable amount of the other spouse's assets, leaving much less for the children.
Make your financial rights clear. Whether they have children or not, and whether they are affluent, couples may like to clarify the economic rights and duties during their marriage.
In the event of a divorce, avoid arguing. Alternatively, they may want to preempt possible problems if they ever divorce by laying down how their assets will be shared and whether either spouse would receive alimony in advance. (However, in a few states, a spouse's entitlement to maintenance cannot be waived, and in most others, a release of alimony will be closely reviewed and will not be implemented if the spouse who's giving up. Maintenance does not have a counsel.)
Obtain debt protection. Prenuptial agreements could also be used to protect couples from the other's debts, as well as a variety of other difficulties.
What if you don't want to sign a prenuptial agreement?
If you do not even sign a prenuptial agreement, state rules will dictate who owns the property you earn during your wedding as well as what happens to that if you divorce or die. The law views marriage as a contract between the wedding couple, and this relationship grants each spouse some automatic property rights. For example, in the lack of a prenup, a spouse has the right to:
- Jointly hold property obtained via marriage to divide the assets between the couple in the occurrence of divorce.
- Accumulate liabilities that other spouse may be responsible for.
- Have voting in how any marital or common property is monitored and administered, including the right to offer or give it away.