Why Should You Sign A Prenuptial Agreement?
With over 50% of marriages ending in divorce, many people are opting for a prenuptial marital agreement. Before we seek to explore whether or not those entering the institution of marriage should get a prenuptial agreement, we must first look at the definition of a prenuptial agreement. A prenuptial agreement seeks to protect your financial stability and assures that “If my marriage doesn’t work, I can cover my assets.”
Prenuptial agreements are legally binding documents (in most cases). It spells out what each person had before marriage and what assets each person would get if the marriage ended in divorce. The general stereotypical conception of the ‘prenuptial marriage agreement’ is of aging tycoons who wish to prevent their younger wives from accessing their family fortune. This is a total misconception as today; many people are choosing to have a prenuptial marriage agreement.
Now, it must be addressed that prenuptial marriage agreements are not necessary or applicable to everyone. However, if you are an entrepreneur, a successful businessman, you are very wealthy, you need it. Furthermore, it shall apply if you have an elderly parent and anticipate a large inheritance and if you are pursuing a very financially rewarding career.
Similarly, if you own your estate or home, have a retirement fund or stock, or if you wish to bypass an expensive divorce completely, then a prenuptial agreement could be a consideration for you to protect your financial assets. Let’s now embark on a discussion looking at the pros and cons of prenuptial marriage agreements that will assist you in your decision about whether to get one.
Advantages Of A Prenuptial Agreement
1. Financial Security
The main benefit of a prenuptial agreement (and why people choose to have them) is that you can protect your financial security. If for any reason your marriage falls apart in the future, and you entered the marriage with considerable wealth (and your spouse only contributed very little financially), then you can protect yourself from experiencing large financial loss. Prenuptial agreements also ensure the protection of family heirlooms in the event of divorce.
2. Protection Of Financial Well-Being Of Your Children
If you or your spouse have children from previous marriages, a prenuptial agreement will ensure your children are financially secure (and prevent your spouse from receiving money that you intended your kids to have).
3. Reduces Conflict
Divorces can be terrible (for both parties) and extremely stressful. By having a prenuptial agreement in place, conflict or arguments (about assets) can reduce as the agreement is a legally binding contract and can be enforced by the courts.
Disadvantages Of Having A Pre-Nuptial Marriage Agreement
1. It Sets A Precedence That You Are Going To Get A Divorce
In a sense, even if on a subconscious level, by having a prenuptial agreement, you are setting precedence over the possibility of divorce. The notion is set that you don’t see marriage as a life-long endeavor or forever. A message is conveyed that your marriage will end in divorce and failure (even before you are married). Your spouse may experience emotional pain if you ask for a prenuptial agreement, believing that you won’t work hard at saving the marriage if difficulties arise. Your partner may even believe that you value money more than them.
2. It May Force A Change In Your Overall Life-Style
A prenuptial agreement influences the division of financial assets. Similarly, property assets, ensuring money has to go to your spouse or children. This correlates with you having a lower percentage of wealth after your divorce which could affect your overall lifestyle.
3. Judges Opinions Greatly Influence The Outcome Of Prenuptial Agreements
The fact that you have signed a prenuptial agreement does not necessarily indicate that a judge will find it to be valid. It can be ‘thrown out of court’ if the judge finds it to be unreasonable. There is absolutely no way of knowing or predictability of how a judge might think about your agreement.
People usually want a prenuptial agreement due to the fear of losing their accumulated wealth. This is if their marriage dissolves. Given the fact that 50% of all marriages end in divorce, this fear is legitimate and valid. There are numerous reasons that one could argue for or against having a prenuptial agreement. However, it appears that people who have already been married and are about to wed their second spouse. They are the main people that opt for a prenuptial agreement. Seemingly, they are aware of the pain and loss they will endure without one in place (from their first marriage experience).
If you have little (or less than $200,000 worth of assets), then a prenuptial agreement would not be necessary. However, if you have extreme wealth (such as an excess of a couple of million dollars), then you perhaps should consider a prenuptial agreement. The persons that would benefit most from a prenuptial agreement would be the ‘entrepreneurs.’
In light of assessing both the pros and cons of having a prenuptial agreement in place before marriage, it is important to mention that whether or not you choose to have one, you should know that all marriages are hard work. Sometimes, people give up too quickly. Marriage requires effort from both people. Equally, this is an endeavor that involves commitment before taking the next step of marriage.
Of course, if there is emotional or physical abuse. One should not subject themselves to that. But it’s important to remember that if from the beginning, both people are committed to making it work with their efforts, through all of the life’s challenges. Therefore, they will never utilize a prenuptial agreement. Only you can decide whether you choose to have a prenuptial agreement or not.
Carefully assess all the pros and cons of having a prenuptial agreement in place. More importantly, seek to get legal advice on the matter. However, in the event of trouble in your marriage, attempt to do the hard work to be united. Do this before taking the option of divorce.