Three reasons a prenuptial agreement is a must for most couples
Premarital agreements, or contracts that specify spousal rights to property and financial support in the event of a divorce, used to be exclusively viewed as tools for affluent individuals. Today, however, many people in California and other states opt to use these agreements to protect themselves. Per CNBC, in the last two decades, the number of prenuptial agreements drafted in the U.S. has quintupled.
Regardless of a couple’s financial circumstances, signing a prenuptial agreement can offer much-needed legal protection and peace of mind. Furthermore, doing so is increasingly becoming a necessity in light of the following issues.
1. Complicated backgrounds
Many Americans bring significant financial baggage into their marriages. Debt is one common issue; according to CNBC, 80 percent of Americans hold some form of debt. Many people may worry about assuming their significant other’s liabilities or facing complications should dividing the debt during divorce ever be necessary. A prenuptial agreement can effectively address both issues.
Remarriage is another situation that can make signing a premarital agreement advisable. The Pew Research Center reported in 2014 that, in four out of 10 new marriages, one or both spouses had already been married previously. Often, these spouses have significant assets; preexisting obligations, such as spousal support; and children to provide for financially. A prenuptial agreement can help each spouse protect his or her personal assets and the interests of any dependents.
2. Conflicts of opinion
Today, many people come into relationships with different views on the financial responsibilities and obligations that a couple should share. For example, a couple may disagree about whether a stay-at-home parent should be compensated for the loss in earning capacity and career opportunities that result from him or her leaving the workforce. Such differences of opinion can cause conflict later and result in prolonged litigation in the event of divorce.
Creating a prenuptial agreement can help couples identify whether they hold financially incompatible views that may impede their long-term relationship. Couples who find mutually agreeable solutions may be able to avoid future conflict over these sensitive financial issues. This may reduce the likelihood that the prenuptial agreement will actually need to be used.
3. Potential future benefits
Although no couple wants to consider the thought of eventually divorcing, it is important to remember that premarital agreements promise substantial benefits if a separation is ever necessary. By eliminating the need for disputes over the financial elements of a divorce case, these agreements can do the following:
- Support a more expeditious separation
- Keep legal costs lower
- Decrease conflict and stress
A prenuptial agreement can also reduce the uncertainty of divorce. In California, conflicts over marital property division and alimony are determined in family law court based on subjective criteria. As a result, the outcome of a contested divorce can be difficult to predict. With a prenuptial agreement, spouses can know what to expect from at least some aspects of the divorce decree.
Crafting an agreement
Drawing up a reasonable, legally enforceable prenuptial agreement takes careful planning and attention to detail. Unfortunately, it is not uncommon for spouses to lose out on the benefits of these agreements by making errors when drafting or signing the legal document. As a result, anyone who is considering a premarital agreement should secure the help of an attorney with experience handling these important marital contracts.