A antenuptial contract, known colloquially as a prenuptial contract, or “prenup”, is a private agreement entered into between a couple who plan to get married. The purpose of the contract is to change some or all of the automatic financial values of marriage.
Deciding whether to get an antenuptial is up to each individual couple, as there are varying opinions on the topic. It is not something that most would want to think about when preparing to wed but is important for couples to weigh up their options and then decide whether this contract will benefit their future marriage. There are various reasons to consider a prenup when you are considering marriage.
- You are effectively planning a future
Preparing a prenup is not particularly romantic, but creating this contract is one of the many means that can help you plan your future with your partner. Think about how valuable it is to be able to plan this with your partner as a team. As uncomfortable as it may seem, it may actually bring you two closer together. By laying everything out on the table early on, you’re less likely to be surprised later. Just like planning where you’re going to live together, or discussing how you might bring up future children, the discussion of a prenup is about planning a life together with care and consideration.
- Prenups are not only for the rich
There is a popular opinion that antenuptial contracts are necessary only for the wealthy, so that a rich fiancé may protect his/her assets. However, couples of more modest means are increasingly using them as well. Prenups do not only protect those with sizeable assets. They can also outline what happens to future assets, and even help protect you from your spouse’s debts. A prenup agreement can also help you to avoid potential financial conflicts and arguments if there is a divorce.
- You can stay in control
Most divorces settle without having to go to trial. Yet sometimes there are still court hearings involved, as well as the possibility of litigation. By setting up a prenup, you stay in control of what you want to happen if you get divorced, rather than having to deal with the court. A prenup also provides your mediator or lawyers with a framework from which to begin the documents that will be submitted to the court for your divorce.
- You want to protect your business
If you are a business owner, you will surely want to protect your business in case of divorce – both financially and against interference from your (potential) ex-spouse. If you don’t get a prenup, the marital portion of your business could be quite substantial, and your spouse could end up with a significant share of or claim to your business. This means that you, as the business owner, may either have to buy out your ex-spouse’s share, or put up with a potentially spiteful ex meddling in your business’s decision-making process. If you are a business owner, signing a prenup is vital. It will help you to avoid the kind of issues or misunderstanding that could in fact ruin your business.
- You can set aside your own savings to use as you wish
Usually, any money accumulated during the marriage is counted as a marital asset, which means that it belongs to both of you, no matter who made or saved the money. Marital assets are included in property division in the divorce. A prenup can give you the ability to set aside your own savings and have it not be considered marital property, so it all belongs to you. At the least, you should consider having a conversation with your future spouse about how you both intend to share money, and what will be considered separate or joint before you get married. People tend to have very different ideas about how to handle money, which can cause a lot of stress in a marriage, if not discussed prior.
- You are marrying someone with significant debt
One spouse bringing a lot of debt into the marriage is a fairly common situation nowadays. Sometimes, the other spouse doesn’t even know about the debt until after the marriage has taken place. This is a very important topic to discuss before marriage. Naturally, if the marriage ends, the other spouse doesn’t want to inherit their ex-spouse’s debt. If you are the non-debtor spouse, keep in mind that a prenup can limit your liability and prevent creditors from going after marital property to repay the debt.
- It can benefit your children
Having children with your spouse can create complications if you decide to get a divorce later. You need to consider how you’ll be raising the kids if you decide to have them. For instance, one of you might become a stay-at-home parent and take time off work. If divorce happens, the stay-at-home parent may find it hard to return to the workforce. The parent with sole custody will probably receive some form of child support, but this will end when the children turn 18 and that support was never meant to be the sole source of income in the first place.
Prenups are also beneficial for a marrying couple with children from prior marriages. They may use a prenup to decide what will happen to their property when they die, so that they can pass on separate property to their children and still provide for each other, if need be. Without a prenup, a surviving spouse might have the right to claim a large amount of the other spouse’s property, leaving little to the kids.
If you have decided that a prenup is for you and your future spouse, you must allow sufficient time for planning this contract. By separating the emotional significance of a prenup from the benefits of having one, both of you can plan together now to avoid future conflict later. Also, remember that it is vital that each spouse is truthful about his/her financial situation when drawing up the contract. If one person hides something, this omission can invalidate the agreement.
See related resource: How to ask your partner for a prenup.