You’ve likely heard the term “prenuptial agreement” in the news in relation to celebrity divorces, like with the divorce of Tom Brady and Gisele Bundchen. For this reason, I often hear the comment that prenuptial agreements are only for the rich and famous, but - what really is a prenuptial agreement? And how could it be beneficial for you and your partner ?
Definition
A prenuptial agreement, also known as a premarital agreement or prenup, is a contract signed between partners before they marry, which dictates how they will divide their assets should they separate in the future. When done properly, this agreement can help minimize the cost and length of a divorce in the future, as it spells out many of the terms of the divorce that were put into place even before the couple was married.
Marriage Insurance
For many, a prenuptial (premarital) agreement can hold a negative connotation and cause negative feelings, as it can feel like it assumes you are getting a divorce before you have even said “I do”. In reality, when completed properly, a prenuptial agreement can act as a form of insurance for your relationship. Think about a house or vehicle for example. You pay for insurance on these items in anticipation that something could happen in the future. Your house may catch fire, but you don’t purchase insurance hoping it will catch fire in the future. You pay insurance for your vehicle, but you don’t plan to be in an accident. A prenup is very similar. You don’t anticipate separating in the future or your relationship ending. The goal for my clients is to live happily ever after together. A prenup, much like car insurance, gives you the confidence to progress with your relationship knowing it is based on love and trust. It allows you to walk down the aisle knowing that your relationship is on a solid foundation, and that you are your partner and have a mutual understanding of your goals for the future.
Who Needs a Prenup?
Prenuptial agreements may not be for everyone, but they also are not just for the rich and famous. Prenuptial agreements are commonly used when:
You are entering a second, third, or fourth marriage
You have your own assets when you get married, such as your own business, home, retirement or investment accounts, etc.
You want to protect your future partner from your debt or be protected from your partner’s debt
In each instance, a prenup allows you to have important discussions that lead to mutually beneficial agreements that make you both feel comfortable about the future. Prenuptial agreements don’t have to be negative. Instead, they are becoming more and more popular as a way to set up your marriage for success. Looking for help with your prenup? Schedule your free consultation today!
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