24 Feb 7 Benefits of Prenuptial Agreements for Engaged Couples in Florida
Prenuptial Agreement Benefits
Prenuptial agreements, or “prenups,” can be very divisive. Some people claim that entering a marriage by talking about the potential for divorce can set a bad tone for the whole relationship. However, if you divorce emotion from the process, there are a host of prenuptial agreement benefits that will benefit both partners in a marriage.
First, there is the obvious positive of dividing assets: when you and your partner sign a prenup, the first thing that you will discuss is who gets what from a financial perspective if things go south. However, there are many prenuptial agreement benefits in addition to the well known purpose that prenups serve in protecting cash. Here are 7 of the most important, and slightly lesser known, reasons why prenuptial agreements are a good idea.
1. They Are Like Insurance
In answer to the common refrain that prenups are pessimistic: think of them like marital insurance. Just like auto insurance, life insurance, and liability insurance for business owners, a prenup doesn’t mean that something bad is going to happen. And it doesn’t mean that you expect something to, either. Do you pay for auto insurance every year planning to get into an accident? Of course not.
Instead, a prenuptial agreement just recognizes the reality that something bad could happen, and there should be some framework in place to help mitigate worst case scenarios. Just like it is irresponsible to forego life insurance because you don’t plan on dying, it isn’t a great idea to disregard the numerous prenuptial agreement benefits that you could experience just because you don’t plan on getting divorced.
2. They’ll Protect Your Inheritance (And Your Children’s)
Are you the heir to a sizeable estate? Or does your family own a nice collection of paintings? No matter what you may be inheriting, a prenup can protect these assets. By discussing inherited property in a prenuptial agreement, you can make sure that things of value that have been in your family for generations remain in your family for generations to come, even in the unfortunate circumstance of a divorce.
Furthermore, one of the biggest prenuptial agreement benefits is that by signing a prenup, you can protect your children’s inheritance as well. If you want to be sure that your offspring someday get to own a valuable part of your family’s lineage, a prenup can help you protect this heritage. Especially if you have children from a previous marriage, prenuptial agreements will insure that heirlooms go where they should.
3. They Can Protect Your From Debt
Even if you aren’t worried about the division of assets during a potential divorce, there is one huge part of your post-separation financial future that you need to consider: debt. From mortgages to credit cards, couples can rack up huge amounts of debt throughout the course of a marriage. And this debt is often “communal” or “marital,” tied to your household rather than an individual. Which gets messy.
Additionally, many states have complicated “community property laws,” which can place debt that was previously owned by one or both partners into a pool of considered assets. For example, if you and your spouse live in a house that your partner bought while in a previous marriage, that house’s mortgage could be considered community property, even though you had no say in originally taking on the debt in question.
Especially if one partner earns significantly more than another, dividing debt equally in the case of a divorce can be disastrous. By signing a prenup, you can negotiate what percentage of the bills each person will have to handle in the case of a separation. Leaving the future of shared debt to divorce court is a huge gamble, and by signing a prenuptial agreement that handles debt obligations, you can take better control of your post-separation finances.
4. They Can Protect Your Business
Whether you are a small business owner or a founder of a large company, you probably have some pride in the business that you built. Creating a successful business takes a lifetime of experience, countless hours of unpaid work, and a moment of inspiration that it is impossible to put a numerical value on. But to a divorce court, your business is all about dollars and cents: without a prenuptial agreement, it is possible for your business to be liquidated or split between several parties, gutting the company you founded.
By signing a prenup, you can be more certain that your business remains intact in the case of a separation. While your business’s assets will probably still be considered in a divorce no matter what kind of prenup you agree upon with your partner, if it is important to you to keep your business in one piece then a prenuptial agreement is definitely in your best interest.
Want to pass your business on to your children someday? Sign a prenup. Want to be sure that the brand you developed will outlive you? Sign a prenup. Again, this is about insurance, and you should be certain that the business you built isn’t a casualty of messy divorce proceedings.
5. They Can Help Set Marital Expectations
While the bulk of the time you spend creating a prenup will involve negotiations around how things are divided in the case of a separation, one of the biggest prenuptial agreement benefits lies in their potential to help outline what is expected in a marriage to begin with. For example, on a personal level, prenups sometimes specify that in the case of divorce resulting from infidelity, the cheating partner forfeits a claim to communal assets. By discussing issues like this when your prenup is crafted, both partners can make their expectations explicitly clear.
And prenuptial agreements can help govern a lot more than marital loyalty. Prenups often specify how couples should handle major financial decisions. Want to make sure that your spouse doesn’t buy a car or house without discussing the purchase? Sign a prenup. Otherwise, you may find yourself responsible for major purchases and the debt that they come with if separation does occur.
Don’t worry, prenuptial agreements typically can’t govern small personal matters within a marriage. Who takes out the trash, who mows the lawn, and how often each partner exercises isn’t something that any lawyer worth their salt will suggest that you include in a prenuptial agreement. Instead, prenups only address the bigger picture issues that can come up in a marriage, and can make sure that expectations are clearly set.
6. They Are Easier Than Relying on State Law or a Judge
Many people who choose not to negotiate a prenup do so without a very good knowledge of what the alternative is. If you are divorced without a prenup, the separation of your assets will be governed largely by state law, which doesn’t do a very good job of taking into account things like personal attachment to property or your wishes for providing for children from a previous marriage. Additionally, without a prenup, the judge who oversees your divorce court will have a lot less to work off of, and will likely make decisions that you aren’t happy with. While negotiating a prenuptial agreement can be stressful, it is a lot easier than leaving your fate up to complicated state laws and a judge’s discretion. If you’d like some advice on how that could possibly work in Minnesota so you can work towards an amicable divorce consider consulting someone similar to KM Family Law.
7. They Can Save You Time and Money
Prenuptial agreements don’t happen by themselves, and it is pretty time consuming to put together a legally adequate one without the guidance of a family law attorney. Rather, the investment of your energy should be in the discussing of details in order to come out with something that you are both comfortable with. Ultimately, in the case of a divorce, you will save a lot of time, money, and energy by having a prenup to turn to. You will be paying for a lawyer during your divorce whether you have a prenup or not, but if you don’t have a prenuptial agreement’s benefits in your corner, you will be starting from scratch. And you can bet that things will be a lot harder to work out under the high pressure atmosphere that comes with separation, which means spending more time and more money on lawyers.
The Bottom Line:
There is a widely held belief that prenups are negative and pessimistic, and that negotiating and signing one means you are already considering your marriage doomed. But in reality, they should be thought of as insurance: no one wants to get divorced when they sign a prenup, but not crafting a prenuptial agreement is irresponsible.
A prenuptial agreement has many benefits, from protecting your business and inheritance to helping set the expectations for a marriage. And by not negotiating a prenuptial agreement now, you set yourself up to spend a lot more time, money, and effort working things out in the case of a separation. If you are considering getting a prenup, think about the seven prenuptial agreement benefits above, separate emotion from the process, and insure your future by signing a prenup today.
Want to hear more about the benefits of a prenuptial agreement? Give us a call at +1.786.309.8588.