A prenuptial agreement is a contract entered into before a marriage or civil union. The content of a prenup agreement, although it can vary widely, commonly includes provisions for division of property and spousal support in the event of termination or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce on particular grounds, guardianship may also be included.
Contrary to popular opinion, prenups are not just for the rich. While prenups are often used to protect the assets of a wealthy fiancé, couples of more modest means are increasingly turning to them for their own purposes. Some reasons why some people want a prenup are: to pass separate property to children from prior marriages, to clarify financial rights, to avoid arguments in case of divorce, to get protection from debts.
In some countries, including Belgium and the Netherlands, the prenup agreement not only provides for the event of a divorce, but also to protect some property during the marriage, for instance in case of a bankruptcy.
A prenup must be in writing to be legally valid. It will be wise to see a lawyer because he will ensure that the prenup fits the needs of the spouses and can stand up well to challenges that may arise.
Generally, you might wish to get a prenup if you fall into any of the following categories:
- You have assets such as a home, stock or retirement funds
- You own all or part of a business
- You may be receiving an inheritance
- You have children and/or grandchildren from a previous marriage
- One of you is much wealthier than the other
- One of you will be supporting the other through college
- You have loved ones who need to be taken care of, such as elderly parents
- You have or are pursuing a degree or license in a potentially lucrative profession such as medicine
- You could see a big increase in income because your business is taking off, or that garage band you play in has just gotten a contract with a big record company.
- One of you has (or anticipate having) debt.
What can a Prenup Agreement Do?
- Protect one party’s assets
- Protect a party from assuming the debts of the other party
- Determine how property will be passed upon death
- Clarify financial rights and responsibilities during a marriage
- Avoid long, costly disputes in case of divorce
If you don’t get a Prenup Agreement?
Commonly, spouse will be entitled to:
- Share and receive ownership of property acquired during the marriage
- Receive some of your property upon death
- Share in any debts acquired during the marriage
- Share responsibilities in managing property acquired during the marriage.
Requirement for a valid prenup agreement include:
- Both parties must voluntarily execute the agreement.
- Both parties must engage in full disclosure of their respective situations at the time the document is executed
- Both parties must sign the document in the presence of a notary public.