When you are planning a wedding, it might feel uncomfortable to discuss a prenuptial agreement with your future spouse, who may see it as a plan for divorce. However, a prenuptial agreement can be a valuable tool to protect both spouses.
Prenuptial agreement
A prenuptial agreement, also referred to as a prenup, outlines how a couple’s assets and debts will be addressed in the event of divorce. While the specific items included in the prenup will vary based on your personal needs, there are some general topics that are useful to address.
The spouses should fully disclose all assets and liabilities to each other, then they can decide how these items, such as real estate, personal property, and investments would be divided. You may also include whether either spouse will pay spousal support.
If the future spouses own a business, either together or separately, they may want to consider whether one spouse will retain the business or if they will sell it upon divorce. It may be helpful to revisit the prenup periodically to ensure it still reflects the spouses’ intentions.
Other circumstances
There are other circumstances where a prenup may be helpful, such as in second marriages, where one or both spouses come from significant wealth, and where there is a desire to clarify financial responsibilities.
In a second marriage, a prenup can address specific assets or property that should remain with that spouse or that spouse’s children in the event of divorce.
A prenup can outline how living expenses, bills and other financial obligations will be paid and by which spouse. Overall, the prenup can provide the spouses with peace of mind knowing those matters have already been addressed.