What is Included in a Typical Prenuptial Agreement?
A prenuptial agreement is a legal document that outlines how two people will divide their assets and debts if they ever divorce. The document is typically signed by future spouses and then executed in accordance with state law. The purpose of the prenuptial agreement is to prevent or reduce conflict during marriage and establish an equitable division of property upon divorce or death.
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Most couples enter into a prenuptial agreement when they have significantly more assets or debts than the other spouse and are concerned about division of such wealth in case of divorce. However, it is important to note that any couple can enter into a prenuptial agreement. Even couples who have little to no assets or debts and wish to preserve their own earning potential in the event of a divorce can create a prenuptial agreement to protect their financial future.
The first part of a prenuptial agreement is to disclose all of the property and debts owned by each party before the wedding date. This includes assets like real estate, investments, and stocks. It also includes personal debts such as credit cards and student loans.
Once the parties have disclosed all of their property and debts, they can then determine what type of property is to be considered separate and marital property, and what type of debts will be owed by each party. This can be particularly helpful for those who own businesses, as it will determine what the business will be classified as in the event of a divorce.
One of the most common types of assets that can be included in a prenuptial agreement are shares in family businesses or professional licenses. This can help to ensure that each party will be able to keep their share of the profits and income generated by the family business in the event of divorce.
Another type of asset that can be included in a prenuptial contract is a family home. This can be especially helpful if both parties are planning to live in the same house. This type of property can be given to either party in the event of a divorce, or can be sold on the open market.
It is also possible to create a prenuptial contract that specifies how each person’s heirlooms and inheritances will be distributed. This can be especially beneficial if each party wants to make sure that the heirlooms and inheritances go to their biological children or other blood relatives.
A final type of property that can be addressed in a prenuptial agreement is a person’s life insurance policy or disability policy. These can be particularly valuable in the event that one of the parties dies before the marriage and wishes to leave their assets to their surviving spouse.
When a prenuptial agreement is entered into, it is important to seek the services of an attorney who specializes in matrimonial law. This is to ensure that the terms of the agreement are fair and legally enforceable. It is also a good idea to speak with the attorney before signing any documents. In addition to discussing the client’s specific situation, an attorney can help define the terms of the prenuptial agreement and explain any laws that may apply to these agreements.