Financial Clarity builds Successful Marriages
Many people think a prenup means you are unsure of the strength of your relationship. “A prenup isn’t romantic”. Entering into a prenup is actually responsible and respectful of the relationship. It is also practical when half of the marriages end in divorce.
The best time to decide what is “fair and equitable” if you break up, is when you are deeply in love and want the best for your fiancé/spouse. Parties may have ideas as to how they wish to handle finances or what is considered their own property vs. marital property. They may have conversations before they are married but if your understanding isn’t in proper legal form than it isn’t enforceable. A prenup should be drafted with foresight into the party’s marriage and finances and properly and clearly detail their intentions. If the marriage should end you can avoid costly divorce and uncertain financial fate.
Many couples believe if they keep everything separate after their marriage than it is their separate property when they divorce. This is incorrect. People believe that the retirement assets they acquire during the marriage is theirs alone because it is in their name. This is incorrect. They believe the business they started prior to the marriage is theirs alone if they should divorce. This is also not the case.
A prenuptial agreement can define for you all financial aspects including:
- Separate property that each spouse brings to the relationship
- Business ownerships
- Division of retirement assets
- If you use inheritance assets for marital purposes what happens
- Addressing expectations for spousal support.
- Responsibility for debt and liabilities at the time of marriage or acquired after marriage.
Couples can enter into financial agreements after they are married which are enforceable should they legally separate or divorce, provided they are drafted properly. Circumstances always change in life and so does your financial situation.
People may inherit funds which they wish to keep separate or use part for marital purposes. Some people incur significant debt which should be their responsibility alone. Other people may wish to change their careers during a marriage and want to be protected or someone may receive a large personal injury settlement that they will need for the rest of their lives. The most common life change is that one party gives up their career to raise the children and has no income but wants to be protected if they should ever get a divorce or separation.
When couples make financial decisions during their marriage, they may wish to solidify their intentions and understandings in a postnuptial agreement, detailing their understandings and agreements. A postnuptial agreement is enforceable if they ever separate or divorce provided it is written correctly.
Unfortunately, when people divorce, they do not always stay true to their agreements made during the marriage. It is irresponsible to rely upon a promise when making a lifelong financial decision. A prenuptial or postnuptial gives assurance and comfort in moving forward with new financial decisions and provides confidence in the enforceability of that decision.