Congratulations on your engagement! Have you and your future spouse discussed your plans for your financial future? A prenuptial agreement may be the right tool for you to protect your assets. Prenuptial agreements have very specific procedural requirements that may affect their enforceability, such as the timing of the agreement, prior information disclosures, and limitations on the types of terms allowable. It is very important for you and your prospective spouse to each retain counsel to protect your present and future interests.
Why should I have a prenuptial agreement? A prenuptial agreement may not be right or every couple, but there are many factors you and your intended should consider:
A prenuptial agreement may be a helpful estate planning option, especially if you are getting remarried and have children from a previous relationship. You can protect both your financial future and the financial future of your children and intended heirs.
If you have specific assets going into the marriage you would like to retain or specific debts of your future spouse you wish to shield yourself from, a prenuptial agreement can help to clearly identify your separate property and debts. Premarital assets and debts will often remain your separate property in a divorce, but a prenuptial agreement can help to identify this property in advance to reduce conflict in a divorce case. Additionally, a prenuptial agreement may be used to classify gains in value during the marriage of a particular asset as your separate property as opposed to marital property. For example, you may protect your real estate value entering into the marriage as well as any increased value during the marriage.
Do you own a business? Although no one enters a marriage with the intention to get divorced, unfortunately things can change. A contested divorce case can get very messy and can result in a split or dissolution of your business if you do not take precaution. In a divorce case, your spouse is entitled to half of the marital value of your business interest. A prenuptial agreement can be used to shield specific assets from marital division, including your business interests.
Prenuptial agreements can also protect your income from marital distribution in a divorce case (subject to certain restrictions). This may include shielding specific types of income, such as income from a family trust or other sources, and it may also include future spousal support limitations.