No one wants to start the conversation about a prenuptial agreement. It’s just not a romantic topic. It may feel that you are already planning for the marriage to end in divorce, but there are situations when a prenuptial agreement makes complete sense, and with some preparation, you can discuss the option with your future spouse. Here are the top five situations when a prenuptial agreement is a sensible option to consider.
1. Family Business.
When you own a business with family members, a divorce without a prenuptial agreement in place will negatively impact the business. During the divorce, the business may need to be valued, and possibly a portion of the business or an equalization award will need to be paid to the divorcing spouse.
2. Inheritance.
When you received an inheritance or expect a sizeable inheritance and do not want to divide the inheritance in case of a divorce, a prenuptial agreement is a cost effective tool to avoid the division of the inheritance.
3. Career Change.
If both spouses have successful careers and intend to have children, the proposed caregiving spouse may be hesitant to pause their career. A prenuptial agreement will outline what to expect regarding spousal or family support and expectations to return to the work force should the marriage fail.
4. Debts, Including Student Loans.
When contemplating marrying a spouse who intends to pursue significant schooling with associated student loan debt, a prenuptial agreement may protect the other spouse from the student loan debt. This is especially important when spouses use a portion of the student loan funds to pay for living expenses.
5. Second Marriage.
When parties marry later in life and have children from a first marriage, they may want to protect the family home or assets obtained from the first marriage to ensue those assets remain available for the first family unit.
Conclusion
There are many situations when a prenuptial agreement is beneficial. The main reason for the prenuptial agreement is for both parties to be aware of each party’s assets and earnings, and an agreement how assets and debts will be divided and possibly how each party will be financially supported in case of a divorce. If you are considering a prenuptial agreement, call our team at 616-285-0808 and let’s discuss your options.
