Once people get engaged, they often start getting all the planning and details of the wedding ready. There are plans for the wedding dress, the bridesmaids, planning the honeymoon, and the gift registry, but very little planning goes into whether a premarital or prenup agreement is needed. If you are a young Chicago couple and have no assets, then maybe you will elect not to get a prenuptial agreement. However, even young couples with no assets can benefit from a prenuptial agreement. There should at least be a discussion as to whether a prenup agreement may be necessary long term or not.
What Are Some Reasons Why You Would Want to Consider a Prenup Agreement?
First of all, you should know what a premarital agreement is and the implications of having one or not having one. A prenup or prenuptial agreement — also called a premarital agreement — is a document that lays out the financial terms of a marriage. It is a contract between the two of you. People enter into contracts before the marriage, called a prenuptial agreement and after the marriage as well, called a postnuptial agreement. These contracts require each side to disclose all of their assets. You will be giving up certain assets you might otherwise be entitled to, and you cannot effectively give them up or waive them if even you did not know the asset existed.
1. You Have Significant Assets to Protect
One reason people decide to get a prenuptial agreement is when there are significant assets to protect. If your parents own a company or business and you are only an employee now but believe someday you will be taking over the business, you should consider getting an agreement in place. The prenuptial agreement can protect this future business interest in the event of a divorce.
2. Planning Ahead for Specific Financial Decisions
Another reason a prenuptial agreement can be beneficial to determine now before there are problems in a marriage is to decide just how specific financial decisions will be made in the event of a divorce. Perhaps the agreement will state that both sides have agreed to be financially independent and no maintenance (used to be called alimony) will be paid to the other. Or each side will agree to pay their own attorney fees in the event of a divorce.
3. Your Soon-to-Be Spouse has Significant Debt
If your soon-to-be spouse is carrying a lot of debt, you may want to consider a prenuptial agreement. If your fiance has credit card debt you do not want to transfer that high-interest debt into a second mortgage on the home to save money, only to find yourself responsible for half of it in the event of a divorce. A prenuptial agreement can lay down the exact terms to deal with debt like this.
4. You Have Proceeds from the Sale of a Home Prior to the Marriage
Additionally, if you just sold your home prior to the marriage and you want to use your $100,000 from the proceeds to buy another house, do you want the first $100,000 to be awarded to you in the event of a divorce? I bet you will. If you do not protect this money by way of a prenuptial agreement before the marriage, you will lose this money in a divorce. Once you buy a new house with your spouse, the court will consider this money a “gift” to the marriage and you will not be able to recoup it. This is another reason for people to consider a prenuptial agreement.
5. This Will Be Your Second Marriage
Second marriages see a higher rate of prenuptial agreements. And with good reason. If one of the spouses has already been through a divorce, a prenuptial agreement makes a lot of sense to them. Particularly if they were put in a situation of having to pay spousal maintenance or they got stuck having to pay the debts off from their now ex-spouse.
If You Are Getting Married, You Should Feel Comfortable Enough to Discuss Your Finances
A prenup agreement identifies all of the assets each person owns and specifies what each person’s rights will be when the marriage ends. Some people feel that it leaves a negative thought in the other person’s head if a prenup is discussed before the wedding, but if you are having trouble discussing money now, it will not get easier later. A discussion about you and your future spouses’ finances should be something that everyone considers before the marriage takes place. Discussing the finances does not have to be a negative discussion that you are afraid to have. Rather, it should be a well-thought-out discussion that can actually clear many misconceptions that you may both have.
More Chicago Couples Are Seeking Prenups
In our Chicago family law firm, we are seeing more and more people come in to get a prenup agreement before the marriage. In the past, the traditional marriage had the husband making more of the income and the wife stayed home with the children. Today, more and more women are taking over the financial responsibility and out-earning their spouses. More and more men are electing to stay home with the children. Naturally, then, we are seeing more and more people come in to put their financial arrangements on paper before the wedding.
Don’t let others convince you that a discussion about your future finances is a bad thing or that it will cast a pall on the wedding festivities. I can assure you, it is a necessary conversation and one that can alleviate trouble later.
Speak to a Divorce Attorney About the Benefits of a Prenup Agreement
All in all, a healthy discussion about your finances should be the first thing a couple has a discussion about, and the failure to do that can lead to divorce. A discussion now with a divorce attorney can open your eyes as to the potential liabilities you will be facing should a divorce loom in your future. A Chicago divorce lawyer can give you the advice you need and help you craft a prenup agreement that is fair and reasonable.
Before you meet with a prenuptial agreement attorney, think of how you both want to handle the assets that you’ve accumulated together. If you both bought a house together, but one put up the down payment, will your agreement allow that spouse to get their initial investment back? Will you decide to keep joint or separate accounts once you marry?
No matter what you decide about a prenup, it’s important to go into marriage with your eyes open. Make sure you and your spouse are as open as possible about your finances and attitudes about money before you tie the knot.
THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/prenuptial-agreements/5-signs-you-may-need-a-prenup-agreement/