When people hear about prenuptial agreements, most of them think of famous and wealthy people. But a prenuptial agreement is simply an agreement that a couple signs before they get married. Sometimes it’s called an antenuptial agreement. An agreement like this usually contains a list of all of the parties’ assets and who owns what at the time of marriage.
Most prenuptial agreements are used by people with assets at the time they marry. “Prenups” typically spell out how the couple will handle financial decisions during marriage. They may also decide how property would be distributed if there is a divorce. Prenuptial agreements are typically used by people with substantial assets or those who have children by a prior marriage and want to be sure that their assets are passed on to their children.
For example, how does one spouse get legal and financial protection so that in the event of a divorce that spouse gets credit for using personal, hard-earned money to pay the mortgage payments on the other spouse’s house? In this situation the spouse should consider contacting a lawyer before marriage to consider a prenuptial agreement that addresses this issue. In the prenup the owner spouse might agree that the value of the house at the time of the marriage is his or hers, but any value added after marriage would be considered marital property.
It’s important for someone with assets to get legal advice if he or she is planning to marry. Conversely, if someone with few assets is marrying someone with assets, that person should seek legal advice to find out what would happen in the event of divorce. No one should commingle their separate assets by putting them in a joint account. It’s best to keep such assets in a separate account and not add any assets (including wages) to that account once married. New accounts can always be opened after marriage and if someone wants to give the marital community a gift of separate property, they can deposit their separate money into their new account. The issue of separate property can be confusing, but the stakes are high, so people with assets, or people marrying someone with assets, should consult a lawyer for a prenuptial agreement. Naturally, at the time of marriage no one expects to get a divorce, but it’s better to be safe than sorry.
Prenups are tricky documents. It’s a good idea to get legal advice if you are thinking of entering into a prenup.