What Is a Prenuptial Agreement and How Does It Work?
Couples desiring to avoid potential property and financial disputes may choose to make a prenuptial agreement, or “prenup”. While you may be hesitant to make a prenup due to its stigma, the fact remains that making a prenup can work wonders for securing you and your partner’s financial future.
What Is a Prenup?
A prenup is a written contract created by a couple prior to getting married. A prenup details how a couple divides finances in the event of a divorce, along with the assets that each spouse owns either separately or jointly. A prenup also includes information about marital debt, which means that a prenup discloses how much a couple has and owes. Prenups can also indicate how long a spouse or the couple’s children can remain in a marital home throughout a divorce.
However, prenuptial agreements can’t include any information about child custody or support due to the fact that this goes against public policy. In these matters, a court will determine what is best for the couple’s children.
Prior to getting a prenup, you should also understand your state’s divorce laws. For instance, Georgia is what is known as an “equitable distribution” state, which means that if a couple gets divorced in this state, marital assets will be split via an equitable distribution method based on several factors. On the other hand, a state like California is a “community property” state, meaning that any marital property earned or acquired throughout the marriage is divided evenly as long as a prenup isn’t in place. In other words, you’ll want to consult with an attorney if you want to learn more about your state’s specific legal terms.
Who Needs a Prenup?
Many people wrongly believe that prenups are primarily intended for wealthy individuals, but this is untrue. While prenups are often made to protect assets for wealthy partners, a growing number of couples with fewer assets and funds are making prenups for financial security.
One reason couples may want to consider creating a prenup is to pass property to children from previous marriages. Without a prenup in place, a surviving spouse following another’s death could gain the right to claim a large amount of the deceased spouse’s property, thus leaving children from the spouse’s previous marriage with much less.
A prenup can also help clarify financial rights regardless of whether either spouse is rich or has children from a previous marriage. Prenups are ideal if a couple wants to avoid disputes during divorce proceedings regarding who owns what property, and to protect spouses from each other’s debts.
In short, there are many reasons why couples may want to consider making a prenup.
Pros and Cons of a Prenup
Before making a prenuptial agreement, couples should understand both the pros and cons of prenups to determine if it’s right for them.
Some pros of prenups include:
- They can preserve inheritance and family ties.
- They can provide protection for children from prior marriages.
- Personal and business assets acquired or purchased before the marriage remain protected.
- Prenups lay out all financial expectations before marriage.
- Prenuptial agreements indicate who receives a spouse’s property in the event of his or her death.
On the other hand, some cons include:
- People may view a prenup as a step toward “planning for divorce” before planning for a wedding.
- Prenups can sometimes cause tension in a relationship and are often perceived as unromantic.
- Resentment could result when making a prenup.
- Prenups can be indicative of a lack of trust.
- Prenups can make it seem as if there’s a lack of commitment between couples.
Weighing both the good and the bad can help you decide if creating a prenup is a good idea.
Consult with an Atlanta Family Lawyer, Today
If you and your partner are planning to get married and have outstanding assets that you would like to distribute the rights to, a prenuptial agreement may be a good investment. The attorneys at Daniele Johnson & Associates can help you and your spouse make a prenup that represents both of your interests, equally. To get the assistance you need, contact us by calling 770-984-5311 to schedule a consultation today.