Did you know that that 1/3 of marriages end in divorce? Make sure you protect yourself. No one wants to end up paying half their income in alimony. Nor does anyone want to risk losing their house.
Fortunately, there is such as thing as a prenuptial agreement. Prenups are basically agreements that a couple makes before marriage about how to split their assets after divorce. This protects both partners from being unfairly punished if things don’t work out.
Here are some important things to remember.
Plan In Advance
Begin working on your prenup far ahead of time. A divorce lawyer recommends to plan at least one month in advance. This will ensure you both are on the same page. It also will make sure that the contract is not a last minute contract, which helps prevent the contract from being thrown out.
Take stock of every financial asset you own. This may include things like businesses, bank accounts, homes, vehicles, investments, and lines of credit. It is also recommended to consider arbitration agreements in your contract to avoid taking disagreements to court. Arbitration is generally much less expensive and unpredictable than courtroom litigation.
Do Deep Research On Your State’s Laws
Each state has its own property and marriage laws. For example, a couple that has lived together for a certain number of years can be considered a common law marriage. This applies to to things like shared bank accounts, alimony, and child support.
Some states restrict how the right to alimony can be waived. States often limit how a prenup can lower child support since it’s viewed as the public’s interest for children to be cared for. Be very careful of what state you get married in.
How to Keep Emotions in Check
Thinking of the possibility of divorce is unpleasant. However, it is much more unpleasant to go through months of expensive legal battles. If your spouse to be makes a big deal out of signing a prenup that will save you both time, money and heartache, you should view it as a red flag. Love can fade so it is important to think of the worst-case scenario.
Talk About The Money
Money is a major point of being married. You are basically agreeing to live together and share your lives. The more you talk about money, the more you will be on the same page. This will make ironing out your agreement much more less painful. Heading into a marriage with an understanding about money gets rid of one of the main causes for divorce.
Don’t Forget to Look at Debt
Getting married can result in one spouse being liable for the other one’s debt. Make sure your agreement takes things like student loans and credit card debt into account. This stops creditors from coming after your property to satisfy your spouse’s prior debts.
Address Kids From Past Marriages
If your spouse has kids from an earlier marriage, your assets could actually be given to them if you died. Make sure you spell out how your assets are to be split in the event of one spouses debt. Otherwise, your kids could end up getting the short end of the stick. You can take this even further by setting up a last will while you are at it.
Spell Out Who is Responsible For Financial Duties
This helps prevent you from running into a clash of expectations. Make sure to say who will be in charge of filling taxes, pay household bills, how bank accounts will be structured, life insurance and many other things.
Don’t put non-financial matters into the prenup. Things like how your last name or who will do certain chores shouldn’t be in your prenup. It only makes it frivolous to a judge.
Make Sure the Contract is Even Handed
If a judge deems the prenup to be unequal or encouraging divorce, the deal may be throw out. That means you will be subject to the standard laws of your state. Make sure there are no incentives for your partner to divorce or any undue treatment.
Keep your prenuptial agreement short and sweet. Know your states laws and plan ahead of time. Marriage is an emotional experience, but don’t let it cloud your reasoning when it comes to the contract. Be proactive and save yourself future headaches.