Getting engaged can be a very exciting experience. People look forward to celebrating their weddings with their loved ones. They also dream of a happy married life. Unfortunately, marriage comes with a degree of legal and financial vulnerability. One of the ways that people protect themselves when taking their relationships to the next level is through the negotiation of a prenuptial agreement.
Prenuptial agreements are contracts signed by fiancés before they solemnize their relationships. Prenuptial agreements help limit the likelihood of a contentious divorce in the future and may help people establish the foundation for a healthy and functional marital relationship.
How can newly engaged individuals determine whether they may benefit from a prenuptial agreement?
Are there vulnerable assets?
One of the main reasons people decide to negotiate prenuptial agreements is the existence of valuable separate property. Maybe one individual owns a small business or professional practice. Maybe they already have a well-funded retirement savings account or own a home. Those assets could be at risk if they later divorce. Prenuptial agreements allow people to protect their separate property by imposing specific rules for asset distribution in the event of a divorce.
Is there a plan to grow the family?
Most modern families have two working spouses. Both of the people entering the marriage may have already invested years into securing a college degree and may have spent years developing their careers. If they intend to start a family together, one of the spouses may have to focus more on the family than on their career. Sometimes, one person even leaves their job to become a primary caregiver. One spouse’s commitment to the family can result in reduced earning potential. People who intend to leave the workforce to support the marital household through unpaid labor may want to negotiate terms for their financial protection if the marriage fails.
What are the spouses’ expectations?
Sometimes, those without any vulnerable assets or concerns about their earning potential may still want to consider negotiating a prenuptial agreement. The conversations that they must have to negotiate the agreement force them to talk about everything from the possibility of future illness to expectations for the marriage. Couples may find it easier to stay married when they start the marriage with the same expectations. The process of talking through expectations regarding personal contributions to the marriage, the marital lifestyle and what might happen if a couple divorces can lay the foundation for a successful and functional marital relationship.
Proposing a prenuptial agreement can be as nerve-wracking as proposing marriage in some cases. People who understand the benefits of marital agreements may be able to approach the topic in a less contentious manner.