For many, getting married is one of the most special times in a person’s life. But before you get caught up in the excitement of wedding planning, you might want to consider signing a prenuptial agreement to protect yourself in case your happily ever after doesn’t go as planned.
The prenuptial agreement must be signed prior to marriage and outlines division of assets and debts between spouses in the event of a divorce, as well as potential spousal support. There are also a few other good reasons why you should consider having a prenup in place.
- You Are Wealthier than Your Spouse
When a wealthy or higher earning spouse does not have a prenuptial agreement, the end result for their finances can be disastrous. Infamously, Mel Gibson lost half of his $850 million fortune in divorce, due in large part to the fact that he did not have a prenuptial agreement in place. Similarly, Madonna’s divorce from Guy Ritchie cost her between $76 and 92 million for this same reason.
Even if you are not a celebrity and do not have a lot of money, it is wise to protect what is yours. A prenuptial agreement can help limit the amount of spousal support/alimony a higher earning spouse must pay.
2. This is Your Second Marriage
If you have been divorced before, you already know that marriage can end in divorce. In fact, research shows that second and third marriages are more likely to end in divorce. Therefore, it is wise to protect yourself against the increased risk of divorce. A prenuptial agreement will help you determine how assets should be distributed to both your first family and new family alike, ensuring your wishes are honored.
- Ensure Sacrifices are Compensated
If a spouse chooses to sacrifice their career to raise children, this choice should be protected by a prenuptial agreement. The agreement can be used to treat both parties fairly, while also ensuring both parents share the financial burden of raising their children. Moreover, spouses who voluntarily give up their career or earning capacity should be adequately compensated for this sacrifice.
4. Protect Your Business
If a marriage ends without a prenuptial agreement and one of the spouses has an ownership interest in a business, the other spouse may end up owning a portion of your stake. A prenup will ensure a spouse does not become an unwanted business partner. Moreover, with a prenup, you will be able to designate future businesses, as well as businesses that have already been in operation, as separate property.
- Prenuptial Agreements Alleviate the Burden of Shared Spousal Debt
The typical millennial carries an unprecedented debt load, averaging $29,400 in student loan debt alone. When it comes time for these young adults to marry, it is only natural that they may not want to assume their spouse’s debt. However, a prenuptial agreement will ensure one spouse is not saddled with the other spouse’s financial burden upon dissolution of the marriage.
Contact us at Hallier Lawrence for a legal consultation about the benefits of a prenuptial agreement.