In the event of divorce how should a prenuptial agreement be written if the is not already in place?
Many couples have a lot of financial assets and debt that they want to protect in the event of a marriage ending. Having this information out in the open, rather than hiding it away, can be a great way to reduce the uncertainty and stress that comes with a breakup.
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There are several key aspects to drafting a prenuptial agreement that need to be addressed properly, says Vivian Kiang, head of Wealth Planning and Trust Administration at RBC Wealth Management in Asia. For starters, each party must be given an independent legal review of the agreement.
It must be fair and reasonable to both parties.
Generally, the prenup should be written to give each party fair share of their spouse’s financial assets without causing them undue hardship in the event of a divorce.
A good prenup must include a comprehensive list of all the assets owned by each party, along with their respective values. It also must provide instructions regarding the division of those assets in the event of a divorce, suggests Octavia Liu, wealth planner at RBC Wealth Management in Asia.
Each party should be able to separate their assets into three categories: separated property, marital property and shared property. Then, a couple should sit down and decide which of their assets they prefer to keep separate, which they’d like to have shared, and which they’d like to have split up completely between the two.
This can be a difficult decision, but a prenup can help you make an informed decision before entering a marriage.
In the event of a divorce, courts will often divide marital property and assets according to state law. The law can vary widely from state to state, so it’s important that you and your soon-to-be-spouse get the advice of an attorney before deciding whether or not to sign a prenuptial agreement.
If you want to minimize the amount of money that will be effected by a divorce, it’s best to draft a prenuptial agreement as early as possible in your relationship. It can also be a good way to ensure that the division of your assets is fair and equitable, suggests Liu.
You should also take into account how long the marriage will last, which can affect how much your assets are divided in a divorce.
The value of your assets and income can also determine how much support you’ll receive in a divorce. In some states, spousal support can be outlined in a prenuptial agreement as well, so it’s best to discuss these details with an attorney before you draft a prenup.
Lastly, you should not sign a prenuptial agreement under duress or with a lack of understanding about the terms of the agreement. It’s also vital that a prenup is filed properly, so it can be upheld by a judge in the event of a divorce.