Prenuptial agreements are not for everyone, and having one is not always the best choice. There are circumstances, however, where a proper, legal prenuptial agreement should be put in place.
When Should I Get One
Prenups aren’t for everyone. A prenup is probably a good idea when:
- One partner is much wealthier than the other. We’re talking serious cash here, which is the millionaire and the maid kind of situation. Among other things, this makes sure your partner is marrying you for who you are and not for your money.
- One partner earns much more income than the other. Again, we’re talking about a serious discrepancy between incomes. If one partner, for instance, earns a six-figure income each year and the other earns nothing because they are unemployed, the parties should think about signing a prenup. Among other things, this helps balance the scales of alimony should the union end in divorce.
- One partner is less financially well-off than the other. A prenuptial agreement provides equal protection for both parties; for instance, it would protect the less financially well-off of the couple in a lawsuit against their wealthier partner.
- This isn’t your first rodeo. Individuals who are remarrying should consider a prenup to make sure their assets are distributed the way they wish should they pass away and one family doesn’t get left out in the cold unintentionally.
- One partner has significant debt. In this situation a prenup can help protect debtors from coming after the solvent partner should a divorce or bankruptcy occur.
- One partner owns a business. In a situation where one spouse owns a business or is a partner in a business a prenup should be put in place; if not, if the owning spouse passes away, the other can take their place in the business, something that business partners might not have signed up for.
- One partner has an estate. Having a prenup can make sure that your assets and your estate are distributed according to your wishes, instead of whatever your spouse decides.
- You plan on children. If one of the couple stays home to raise children, a prenuptial agreement can help make sure the financial responsibilities of their upbringing are fairly shared between both parties.