What is it?
A "prenup" is a legally binding contract between two people who are about to marry which, among other things, dictates how property will be divided in the event of a divorce, and whether alimony or spousal support will be paid. In the absence of such an agreement, state law decides these issues.
A typical prenup agreement states that each partner will keep the property they bring into the marriage, and that assets accumulated during the marriage will be split 50/50. However, your prenup should be customized to your particular situation. You should consider having a prenup if you fall into any of the following categories:
- You earn significantly more income than your future spouse
- You have substantial assets
- Your spouse has substantial debt
- You own a business or business interest
- You anticipate receiving an inheritance
- You have children from a previous marriage
Although the concept of a prenup seems like it might extinguish the flames of romance, the open communication it requires often serves as a powerful building block to a strong marriage. It can also provide each partner with financial security and peace of mind, and may save you from emotional distress and court costs later on.
Make it Legal
To create a valid prenup, keep the following points in mind:
- Hire a separate and independent lawyer for each partner
- Sign the prenup at least six months before the wedding
- Fully disclose all financial information
- Make sure the agreement is fair and reasonable to both parties
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