The gossip columns and news headlines are filled with stories about the seemingly unfair distribution of assets after celebrities divorce. In a typical scenario, one ex-spouse gets the raw end of the deal, while the other is awarded a windfall – which could be in the millions when you consider a star’s sizeable salary. What many people don’t realize is that divorce courts are simply applying valid legal principles, even if the arrangement doesn’t seem equitable.
However, it is possible to avoid the application of divorce law by executing a “prenuptial” agreement that lays out relevant financial and other legal matters after the marriage ends. Rather than allowing a divorce court to make the determination, the parties use a prenuptial agreement to identify their preferences regarding the distribution of assets and debts. While many presume that these arrangements are intended to protect the richer spouse from losing everything in a divorce, the truth is that there are multiple reasons for both parties to execute a prenuptial agreement. Here are five of them.
5 Reasons to Consider a Prenuptial Agreement
Address Income, Assets, and Debts
Each member of a marrying couple brings assets and debts, and earns a certain income that they’ll contribute to the union. Part of the process of preparing a prenuptial agreement is listing all of these items, so each spouse has an idea of the financial wealth of the other. A typical prenup will include provisions that penalize dishonesty in listing asset, debt, and income information, so the arrangement is a way to get full disclosure of this important information.
However, even without to the issue of which is the richer spouse in the event of a divorce, the exercise of listing these items is important for couple’s planning their financial future together.
Some couples preparing for their wedding day aren’t necessarily doing it for the first time, so a prenup is valuable in remarriage situations. When you remarry, your legal and financial state of affairs can be quite different. For instance, you might have minor children and/or an ex-spouse that you’re legally required to support. In addition, it’s possible that you own a home or other assets of considerable value. A prenuptial agreement can account for these obligations and assets, especially in the event of your passing. You’ll want to ensure that your property is distributed according to your wishes, and that your first family – and any others you develop through later relationships – aren’t cut off.
Every relationship is unique and a spouse doesn’t leave behind their entire lifestyle when marrying. Certain factors transition over into the marriage and couples need to account for these special circumstances. One example would be if one spouse has an ownership interest in a business. This is a unique type of asset because it cannot be easily distributed as part of divorce proceedings, but a prenuptial agreement can be used to protect the interest. Another possibility might be that one person decides to quit their job to raise children. Taking on that responsibility has value that a prenup can accommodate.
Special circumstances would also include the familiar Hollywood scenario: One spouse either makes more than the other in income, or brings significant assets to the marriage that precede the relationship. Or, one person carries considerable debt and the other doesn’t want that liability to become his or her own if the marriage ends. A prenup can address these possibilities to ensure a more equitable result in the event of divorce.
Communication NOW Reduces Stress Later
Finances can be one of the primary areas of stress within a marriage, so sharing this information before marriage means fewer surprises and a unified approach to money. When the lines of communication are wide open about finances, the issues raised by them, the terms of the prenup, and the reasons behind them, both parties have more realistic expectations going into the marriage. Finding out later that your spouse has racked up significant debt or has financial obligations he or she never mentioned are examples of how not having a prenuptial agreement actually increases the chances of divorce.
Avoid Court and Costs (if you DO divorce)
If things don’t work out between you and your spouse, you save on costs and attorneys’ fees because you’ve already agreed on how to dissolve your marriage – without going to court. With a few limited exceptions, a prenup is binding, so it’s futile to try to fight for a distribution of assets or a support arrangement that contravenes the spirit of the agreement.
A prenuptial agreement isn’t just for the rich and famous: It’s for every couple to consider as the wedding date approaches, as a way to resolve financial and legal matters before emotions get in the way of logical thinking during divorce proceedings. You should always consult with an attorney about the legal implications of a prenup, but it’s not difficult to execute the paperwork when you do reach an agreement. In most states, you’ll simply need to sign and date the paperwork, and have the agreement verified by a notary public.
Notaries for Prenuptial Agreements
The purpose of notary services as part executing a prenup is to prevent the possibility of fraud in the transaction. While there’s no worry about the identity of the parties, a notary public’s job is to verify the identity and completeness of the document. Mobile notary services are available for convenience purposes, so there’s no reason to avoid signing a prenuptial agreement: It’s for the protection of both spouses, and no longer carries the social stigma it once did. If you’re getting married and are considering a prenup, talk to a notary public service for assistance with executing paperwork.