The Advantages of the Prenuptial Agreement

When people walk down the aisle and get married, they hope the union will last a lifetime. The cold reality, however, is that roughly half of all marriages in the United States end in divorce as of 2014. With the odds of splitting from a spouse so high, people turn to prenuptial agreements to protect their assets. These agreements are legal contracts that have both advantages and disadvantages.

A prenuptial agreement can protect your financial stability. This is the reason the majority of people create and sign a prenuptial agreement. In community property states - Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin (Alaska is opt-in) - the law says that, without a prenuptial agreement, you and your spouse share assets, property and debts equally regardless of whose name is on titles, registrations or deeds. That can mean big financial loss if your spouse didn’t contribute as much to the marriage monetarily as you did. In separate property states where the law says you own most non joint assets and debts in your name, a prenuptial agreement can create a more even division of property and assets. Prenuptial agreements also can ensure your spouse doesn’t get family heirlooms, and they define clearly what you and your spouse consider marital and separate property.

A prenuptial contract can protect the financial stability of your children. Without a prenuptial agreement, your spouse may receive monies or assets you intended your children to have. Many couples work together for the good of their children even after separating, but if your marriage creates a blended family, a prenuptial agreement can stop your spouse from taking assets or property for his own kids over yours.

You may be able to outline spousal support. The Uniform Premarital Agreement Act of 1983 is applicable to just over half of all states. In states where this law applies, it is possible to use a prenuptial agreement to create a basis for spousal support.

A prenuptial agreement reduces conflict. A prenuptial agreement is a legal contract the courts can enforce. When you sign one, you eliminate the possibility that you and your spouse will argue over particular issues, as the agreement dictates how those issues are to be handled.

Next week we will look at the negative side of prenups.

THOUGHT OF THE WEEK

“The trouble with not having a goal is that you can spend your entire life running up and down the field and never scoring.”