Love is the cornerstone of any marriage. While they may seem unromantic, prenuptial agreements serve an essential role in safeguarding the interests of both parties.
A prenuptial agreement has the power to strengthen a marriage. It should not be seen as a sign of mistrust or lack of commitment but rather as an important agreement that fosters openness and trust and lays the foundation for vital conversations on how assets will be managed during the marriage.
It also sets the stage for a smoother and less expensive divorce—in the unfortunate event it happens. At Durak Law in Franklin, Tennessee, our family law attorneys understand the importance of protecting your financial future with a prenuptial agreement, and our team is here to provide the guidance you need.
What is a Prenuptial Agreement?
In a nutshell, a prenuptial agreement or ‘prenup’ is a legally binding agreement made before marriage, laying out how debts and assets will be distributed in the event of death, dissolution, or divorce. It is vital for couples looking to protect their financial interests as it defines ownership rights and can be used to prevent or resolve disputes.
Key Benefits of a Prenuptial Agreement
There are many advantages of having a prenuptial agreement, including:
- Asset Protection: Couples get into marriages with pre-existing assets, including investments and property. A prenup can help safeguard these assets by identifying those that will become marital property and those that continue to be separately owned. This helps prevent potential disputes over their distribution in the event of a divorce.
- Debt Protection: Married couples share financial responsibilities — including debt. A prenup can ensure peace of mind and financial stability by delineating individual and joint debts. As such, one spouse will be saved from carrying the other’s pre-existing debt obligations.
- Preserving Family Heirlooms: A prenup can help retain family assets. For couples with children from previous relationships, this legal agreement can protect their inheritance and specify how assets will be distributed.
- Clarity and Transparency: A prenup creates a clear financial roadmap from the beginning of the marriage. A marriage can intertwine financial responsibilities, debts, and assets. This agreement clarifies each partner’s financial situation and expectations as they enter the marriage. This clarity provides peace of mind and allows couples to focus on their romantic relationship without constantly worrying about their finances.
Common Misconceptions About Prenuptial Agreements
Some of the inaccurate beliefs surrounding prenups include:
- “Prenups Are Only for The Wealthy”: Prenups can be beneficial to all couples, regardless of their level of income. They are essential for people with family obligations, debt or personal assets. By preventing the occurrence of future disputes, these agreements save couples of all income levels time and money in the event of a divorce.
- “Prenups Signal a Lack of Trust”: Prenups can help strengthen marriages. When creating these agreements, couples must be able to sit down and talk about financial matters. Each party must also be willing to compromise for the good of the relationship. These are all great signals of a strong relationship.
- “Prenups Are Only Useful in Divorce”: Many people think prenuptial agreements are only relevant during a divorce. However, these documents can be useful in estate planning and establishing ownership and financial expectations.
Who Should Consider a Prenuptial Agreement?
The following individuals should consider a prenup:
- Individuals with Substantial Assets or Debt: People with notable assets or liabilities should consider getting a prenuptial agreement before entering a marriage. This way, you can be sure that any income or obligations deriving from these assets or debts remain separate.
- Business Owners: If you own a business, you should seriously consider a prenup. This agreement can help keep your business as a separate entity. If you don’t, you may lose half of your business to your spouse in case of a divorce. Losing half your entity’s value can have a devastating effect on its survival. This impacts your personal finances as well as those of your employees.
- Those with Children from a Previous Relationship: A prenup can help secure the financial stability of children from a previous relationship by safeguarding their inheritance. The agreement can help keep their inheritance unentangled from the marital relationship and out of any future divorce proceedings.
Key Elements to Include in a Prenuptial Agreement
Some of the essential components of a prenup include:
- Division of Assets: A prenup should identify which assets will be held jointly and which will remain separate. It should also provide an outline of how assets acquired before and during the marriage will be distributed in the event of a divorce
- Debt Allocation: It is essential to document how you intend to handle debt in your marriage. You can specify whether each partner will be responsible for their pre-existing debts or if you intend to shoulder any debt responsibilities together as part of your household bills.
- Spousal Support: Will alimony be provided in case of a divorce? Married couples rarely earn the same amount of money. In the event of a divorce, one party may have to support the other, leading to many contentious discussions during divorce proceedings. You can use a prenup to waive or reduce a spouse’s right to alimony.
- Financial Goals and Responsibilities: You can use a prenup to detail marital financial goals and responsibilities. For instance, you can specify details on how investments will be handled, how you will get credit or spend money, and who will be in charge of the bank accounts, paying bills, and filing income tax returns.
The Legal Process of Drafting a Prenuptial Agreement
A prenuptial agreement is usually drafted by a qualified family lawyer based in the couple’s state. The couple then signs it before finalizing the marriage.
The main steps involved in drafting a prenup include:
- Financial Disclosure: Revelation of all factors, including income sources, liabilities, accounts, and assets that can create a change in financial position.
- Negotiation: Each partner must be represented by an attorney to prevent a conflict of interest. The resulting agreement must be fair, and each party must have enough time to review it before it is signed.
- Formalization of the Agreement: If both parties are comfortable with the agreement, they must sign it before their marriage is finalized.
Courts have the power to invalidate a prenuptial agreement if it is deemed unfair to one partner. To avoid unnecessary issues, it is best to consult a licensed legal professional when drafting a prenup.
Contact Durak Law to Talk to a Seasoned Family Law Attorney
A prenuptial agreement can help couples safeguard their financial futures. If you are looking to build a strong and transparent marriage, consider getting a prenup before you get married. To learn more about prenuptial agreements or have one drafted by a qualified professional, call (615) 812-2829 or fill out this form to talk to a seasoned family law attorney at Durak Law.
