Prenuptial Agreement Benefits and Drawbacks
Did you know that prenuptial agreements date back to 2,000 years ago? In ancient Hebrew civilization, prenuptial agreements were called ketubah — marriage contracts that served to protect the bride’s dowry in case of divorce or the husband’s death.
Today, prenuptial agreements are used to protect both spouses’ assets in the event of a divorce. For this reason, a lot of modern couples willingly sign prenuptial agreements. However, they can also be seen as unromantic and may create tensions between couples. We’ve all seen many movies where an engaged couple ends their relationship because of conflicts brought about by prenuptial agreements.
Ultimately, whether or not to sign a prenuptial agreement is a personal decision. If you and your partner are deliberating whether or not a prenuptial agreement is right for you, we’ve compiled a list of benefits and drawbacks to help you weigh your options.
You may also consult with an experienced prenuptial agreement lawyer to help you make the best decision for your unique circumstances.
What Is a Prenuptial Agreement?
A prenuptial agreement (also referred to as a “prenup”) is a legally binding contract created by two people engaged to be married. The purpose of a prenup is to protect each spouse’s assets and property in the event of a divorce.
Prenups typically contain a list of the properties owned and debts owed by each party and clearly specify each person’s rights should the marriage end. They also deal with how joint property is to be divided.
What Are the Benefits of a Prenuptial Agreement?
There are many benefits to signing a prenuptial agreement, especially if you and your partner have significant assets. A prenup can:
Foster Better Communication About Finances
One of the main reasons couples get divorced is because of financial problems. Money is often a touchy subject, and it can be difficult to discuss your financial situation with your partner. However, a prenup forces you and your partner to have an open and honest conversation about your finances before marriage. This can help you avoid any financial surprises down the road.
Protect Your Business
If you have a business to your name or a family business, a prenuptial agreement can protect your business interests in the event of a divorce. Without a prenup, your spouse may be entitled to half the value of your business in a divorce.
While it may sound grim, in cases where each partner comes into the marriage with their own business and significant individual assets, signing a prenup alleviates marital strain. Again, the terms of your prenup are up to you, so you can decide how much of your business you want to protect.
Ensure That Children From Previous Relationships Are Provided For
If you have children from a previous relationship, you can use a prenup to ensure they are taken care of financially in the event of your death. You can also use a prenup to expressly state whether or not your spouse’s children will be entitled to any of your assets in the event of a divorce.
What Are the Drawbacks of a Prenuptial Agreement?
While there are many benefits to signing a prenuptial agreement, there are also some potential drawbacks that you should be aware of. These include:
Your Partner May Question Your Trust
If you’re considering a prenup, it’s important to have an open and honest conversation with your partner about why you feel the need for one. If your partner is resistant to the idea of a prenup, it may be because they feel like you don’t trust them. This can lead to tension and strain in your relationship.
A Prenup Can Be Unfair to One Spouse
A prenup, if drafted without consideration, can be unfair to one spouse, especially the one who may have given up their career to care for the home and family while the other focused on their career or business. If you’re considering a prenup, ensure that the agreement is fair to both parties.
A Prenup May Not Be Enforceable
If a prenup is not drafted correctly, it may not be enforceable in court. This means that, in the event of a divorce, the court may not uphold the terms of your agreement. Therefore, ensure that your prenup is clear, concise, and free of any ambiguity. Also ensure that both you and your spouse’s lawyers review the agreement to ascertain that it’s fair and in order.
If you need help creating or reviewing a prenuptial agreement, our competent prenuptial agreement lawyers at Musson Law can help. Give us a call today to schedule a free consultation.