Pre-nup Agreements – are they worth it?
A pre-nuptial agreement (known as a Binding Financial Agreement) is becoming more and more the norm for couples who are wanting to form a long-lasting relationship whilst also thinking with their heads and protecting their assets. It could be considered like insurance, you may not want it but if the time comes to claim, then you’ll be so glad you have it.
Any couple who brings personal or business assets to the marriage can benefit from a prenup. The most basic of these contracts lists an inventory of premarital assets that in the event of a divorce will remain the property of their original owner.
Pre-nups are good because they preserve the expectations of the parties and prevent surprises in a property trial; although at the time of planning a ‘forever after’ that may be the last thing on your mind. The agreements can specify that future income from a business or additional asset accrued through inheritance are not to be shared if the marriage ends.
You can include almost anything in a prenup, except you can’t limit child support, and you can’t limit child custody and visitation. Again, you may not be even thinking along that line whilst the romance is over the moon and everyone is blissfully in love. Prenuptial agreements can address property acquired before a marriage, such as money in savings, a home or even your Grandma’s antique desk. The problem people have is after they get married, what’s become yours has become co-mingled. Even if you make a Will and exclude your spouse, Family Courts will look past that.
Prenups are especially helpful for couples who come into the marriage with children, and for older couples getting married for the second or third time around with accumulated assets. Sometimes a pre-nuptial agreement can create a bad taste, but a necessary document for those entering second or third marriages, especially when you have children and significant assets, and want to make sure their children and family are protected if something happens. Also if one spouse’s assets are far greater than the other, it is a wise move and the wealthier party would most likely insist on an agreement prior to formalizing the relationship.
Prenuptial agreements are supposed to be based on fair and full disclosure of assets at the time of signing.
You can avoid all of this pre-marital formality if you just keep everything separate from each other; separate bank accounts, separate property, and separate expenses, but this would rarely happen successfully in the eyes of a judge. A recent poll in US suggested that 44% of singles and 49% of divorced people said they thought having a prenup was a good idea whilst 15% of divorced people said they regretted not having one.
Just as a marriage certificate is a contractual agreement, a pre-nup can be considered part of that process of joining two lives.