We've all heard about how prenuptial agreements can help to protect your personal assets in a marriage, but do they really work? Many people believe they can be a "romance killer" as the wedding day approaches. There is no doubt that these agreements can tend to reduce a marriage to a business relationship, but they also do a lot to prevent cold feet. In reality, there is no reason to be afraid of taking such a precaution. While marriage may represent the joining of both your emotional and financial properties, this wasn't always the case. Romantic love is a relatively modern development in a marriage. Historically It was a formally arranged agreement for sharing property.
What is a prenuptial agreement?
The dual nature and purpose of marriage has led to the formal adoption of a prenuptial agreement as a way to protect each spouse's financial interests. While it's true that most people associate prenuptial agreements with protection in a divorce, they are also partially responsible for keeping marriage alive in a culture of cohabitation.
Contrary to what many people believe, a prenuptial agreement is often written in anticipation of death, not divorce. This proactive step for taking care of a surviving spouse after your death could be seen as one of the most responsible – and even romantic – actions you can take in a marriage.
When viewed through a positive lens, the prenuptial agreement can actual perpetuate harmony in a marriage. Just the simple act of setting financial issues straight and preventing them from causing conflict can be a positive first step toward your new life together.
Is a prenuptial agreement right for everyone?
If you and your fiancé have never been married, don't yet have children or any substantial assets, a prenup might not be necessary. However for everyone else, especially people with children, a former spouse and substantial assets, prenuptial agreements are strongly recommended.
If you are entering a second marriage, a prenuptial agreement is almost always necessary. In these cases, one or both spouses might have significant assets and may want to include family members from their first marriage in their will. This is because once you are remarried; your new spouse will have an automatic entitlement to part of your assets.
What are the guidelines for creating the agreement?
It is advisable not to wait until the last minute before your wedding to try to draft and execute a prenuptial agreement so as not to allow either spouse to sign it under "duress." Also, drafting a fair and effective prenuptial agreement will take a fair amount of time and planning.
A prenuptial agreement is valid only if it is created under two conditions:
1) There must be "full disclosure" between the two parties, in order that there will not be a finding of fraud, misrepresentation, or duress (a finding which would render the prenuptial agreement invalid). This means both you and your spouse must thoroughly disclose your financial details: income, assets, and liabilities, in the document.
2) To reduce the risk of drafting and signing an unfair agreement, each spouse must individually be represented by separate attorneys prior to signing a prenuptial agreement.
As long as these two conditions are met and the contents of the prenuptial agreement are acceptable to both parties, each spouse must sign the prenuptial agreement in front of a notary.
It is important to remember that a prenuptial agreement is not just a document that protects and distributes assets in case of divorce. It is also protects and distributes assets in the event that one of the spouses should die. Thus, the prenuptial agreement is not the exclusive tool of the divorce attorney, but is also used by the estate planning attorney on a regular basis.
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