The Basics of Prenuptial Agreements

A close up of a hand signing a document with a fountain pen

Statistics say that, in 2020, nearly half of all marriages ended in divorce, and while this is a fact that most people don't want to think about when they're planning their weddings, the fact is, having legal documents in place before you say "I do" can save you both headaches in the future. Financial experts recommend couples create a prenuptial agreement - also called a prenup - before walking down the aisle.

A prenup is a legally enforceable contract entered into by two people before they are legally married, and it lists each person's assets, liabilities, and debts, and to whom each of these belong before marriage, and what happens to these if the couple divorces.

Prenuptial agreements typically cost anywhere from $1,000 to $10,000. The price varies widely due to the number of assets and debts, the complexity of the agreement due to assets and debts, and where the couple resides, as laws vary state-to-state.

A prenuptial agreement acts as financial protection for you pre-marital assets, children, and families, as it predetermines what happens in a divorce. The agreement can detail complex situations such as student debt incurred for a profession that supports both spouses; in this scenario, should the debt also be shared? Assets and debts incurred during the marriage can also be outlined. While these are typically shared by both spouses, the agreement can specify certain assets or debts that will be kept separate; an example could be spouse who starts a business with their own capital from before the marriage - the business profits or debts can be kept separate from the marital assets and liabilities.

The prenup can also detail how debt will be allocated during a divorce, which can streamline the proceedings. Additionally, the prenup can determine how children from a previous relationship will be cared for in the event of divorce, including inheritances. If a spouse shares business dealings with extended family, these assets can also be included in the prenup to ensure that these properties stay with the family.

A prenup can also detail responsibilities within the marriage, such as who pays for specific expenses, who maintains and monitors bank accounts and investments, whether both spouses must be a party to any agreements or contracts entered into during the marriage, and who is responsible for tax returns.

Ultimately, getting a prenuptial agreement isn't necessary, but, if the worst should happen, it can save you time, effort, money, and stress in divorce court. The dissolution of a marriage without the arguments over assets, debt, the care of minor children, inheritances, and more can protect you from additional tension during an already stressful situation. Your attorney through our Legal Protection Subscription Plans for Individuals and Families can give you advice about any prenuptial agreements you might require, and all for no additional fee. Don't let the courts decide what's best for you. Sign up today!