Prenuptial agreements are no longer seen as something only used by the rich, famous and powerful. However, younger couples or those of any age who may not have what they consider significant assets to protect still too often dismiss the idea
First, prenups aren’t just about what you have now, but what you may accumulate in the future. That medical degree you’re working on will likely lead to a healthy income – not to mention substantial debt. That business start-up your fiance has could end up with offices around the world. You may both end up with inheritances larger than you ever expected.
It’s better to determine now just how assets – and debts – will be split should the marriage end than arguing about them amid divorce when emotions can cloud your perspective. A relatively small amount of money spent on a prenup can save you substantially more later on.
While the term “prenup” may still have negative connotations to some people, it’s really an insurance policy. Having car insurance doesn’t make it more likely you’ll be in a crash. However, it will make things easier for you if you are.
A prenup requires financial planning
Prenups are also a type of financial planning. That’s something too few couples do before they get married. Differing ideas about money are among the leading causes of marital friction. Discussing what assets and debts you will keep separate and which you’ll share can help ensure that you’re on the same page – and open the door to more detailed discussions about financial goals that you might not have otherwise had until much later.
For those who may not yet have a home of their own or significant retirement savings, prenups can protect family heirlooms and assets you intend to leave your children from a prior marriage or relationship. A prenup can also protect you from getting stuck with your spouse’s debt in a divorce.
It’s crucial that each person has their own legal representative as they develop a prenup. This is crucial to ensuring that your rights and interests are protected.