What Should Be in a Prenuptial Contract?
A prenuptial contract is a document that a couple enters into before they get married. It outlines the assets and liabilities of the parties in case they divorce. It can help prevent some of the more difficult issues that can arise during a divorce from becoming legal sticking points.
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What Should Be in a Prenuptial Agreement?
Prenuptial agreements are important to consider because they can help to ensure that the division of assets and debts does not become an issue in a divorce. They can also help to prevent disagreements over alimony and child support.
The prenuptial agreement must be entered into in good faith and must be fully and fairly disclosed by the parties. It must also be formally executed and acknowledged.
The most common issue that is contested in a divorce is how property will be divided. Including a specific section in the prenuptial agreement to determine what will be separate property and what will be a marital property can help to avoid a lengthy and contentious divorce.
If one spouse brings a high-interest credit card or student loan debt into the marriage, the prenuptial agreement can reaffirm that the debt is the responsibility of the person who incurred it and not of the other party. This can protect you from a high-cost divorce trial that will be difficult and time-consuming for both parties to navigate.
Defining Separate Property:
If you own a family business, a home, or even a family heirloom, you should include a provision in the prenuptial agreement that establishes what will be your separate property and what will be marital property. This will make sure that you continue to retain your business, home, or family heirloom after the divorce.
Managing Assets and Liabilities:
It is also important to specify how you will manage household bills, joint accounts, credit cards, and savings. Depending on your situation, this could mean that you both agree to pay the same amount each month for your household expenses or that you will each put a certain amount of money into an account that will be used exclusively for your bills.
It’s not uncommon for couples to include a clause in their prenuptial agreement about what they expect out of each other in the future. This can be anything from work expectations during the marriage to putting the other spouse through school or investing in projects.
Creating Your Own Estate Plan:
If you have children from a previous relationship, it is essential to include this in your prenuptial agreement so that they will receive some of the assets you own. This will ensure that your children will be treated equally in the event of a divorce.
Putting Value on Property Before and During the Marriage:
The value of a company, home, or other illiquid assets often becomes a big deal in divorce proceedings. By having a professional value the assets ahead of time, you can avoid a bitter fight over who will be able to get their hands on them in the event of a divorce.