A prenuptial agreement, also referred to as a prenup, is a signed contract that allows couples to analyze their financial standing before they get married. This contract helps the couple to decide how they want to handle their finances throughout their life.
When it comes to prenups, many people are misinformed. Many don’t know the full potential of the contract. Until you look into how a prenup works and how it can benefit your marriage, most people don’t fully understand a prenup. Although this contract can be a great step for many couples, there are negative connotations that come with a prenup.
- A prenup is only for the wealthy
Many believe that the only time a prenup is necessary is if there is a lot of money involved. This could be the result of many movies displaying a rich couple protecting their assets. In actuality, prenups allow the couple to keep their debts separated, clarify their financial responsibilities and pass assets to children from prior marriages.
Prenups help anyone who has financial responsibilities, regardless of the amount. This allows for separate assets to remain separate in the event of a divorce or death.
- You can put whatever you want in a prenup
While you can write anything you want in your prenup, it won’t all be accepted. Because a prenup is a legal document, both you and your partner must have your own legal representation. Both parties must agree on everything you put in the contract. After you’ve reached a conclusion that both parties are satisfied with, a judge decides if the contract is too unreasonable or one-sided. Once the agreement is fair for both parties, the judge will sign off on it.
- Once a prenup is written, it cannot be changed
Couples are not entirely bound to the agreement they wrote. Prenups can be changed throughout different stages of one’s life just like a will can. In case of a divorce, one partner can volunteer to give the other more money that was required from the prenup if they so choose. As long as the requirements of the prenup are being met, you and your partner can choose what you want to do with the rest of your money.
A prenup is also a great tool to use and keep updated to help you form an estate plan later in life. Because a prenup is flexible and can change with the support of both parties, many couples translate their prenup into their estate plan.
- A prenup anticipates divorce
Many people believe that if you put together a prenup, you’re predicting a divorce. However, the opposite ends up being true. Many couples that sign a prenup prevent a divorce because they have already discussed one of the many stresses that a marriage invites: money. Because these couples have to lay out all of their assets and debts on the table and figure out how to handle it, they allow for a conversation about money to remain open throughout their marriage.
A prenup is an agreement that can open a conversation on money and your expectations that you have for your money before your marriage begins. It’s a useful tool that can help you remain financially independent on certain aspects in your marriage.