We all dream of a happy romantic story – having an intimate wedding attended by friends and family, living in a modest suburban house with two kids, and growing old together. Often amid passion and love, difficult but practical topics relevant to a stable marriage are not discussed. However, reality comes knocking whether one wants to face it or not. It is better to reveal one’s cards through proper and open communication for a healthy relationship, especially with finances. Money has been found out to be the leading cause of stress between couples. Find out why getting a prenuptial agreement before marriage can be a practical solution for a healthier co-existence.
Provides a solid financial framework
A prenuptial agreement is a legally binding contract signed by engaged couples to detail how their assets will be divided in the event a marriage is terminated. Since each partner is required to disclose all financial assets and liabilities, there will be no surprises later on. Couples are also forced to discuss early on their stance on money – how it should be saved, spent, and divided.
Additionally, both partners must be represented by legal counsel to ensure the agreement was done voluntarily and without unfair provisions. Having a reliable attorney in your network from the start can help one navigate the different laws governing divorce and marriage, whether you’re a resident of Colorado Springs or from a different state.
Protects each other’s credit
Divorces can ruin credit and financial stability without a prenup. You can be burdened with alimony, your spouse’s debt or child support dues in addition to normal living expenses. Student debt, in particular, is worrying given how it is now the second-highest consumer debt category – higher than credit cards and auto loans – at $1.5trillion. You can also include a clause requiring both partners to review credit reports and credit scores together to spot potential financial issues.
Preserves family ties and inheritance
A prenuptial agreement can also be an estate planning tool due to its capability to limit a surviving spouse’s right to inherit. In common law states, the surviving spouse has the right to inherit all existing property when the other dies despite the terms of a valid will. One’s intended beneficiaries might end up with less if one is not prepared. Under the prenuptial agreement, state property laws designed to favor the surviving spouse need not apply. Both partners can also agree to waive each other’s rights to their retirement accounts, treating them as separate properties.
Avoids lengthy and stressful separation proceedings
Divorce proceedings can be long and stressful, especially when emotions are high. One will be forced to talk about problems and plans in the courtroom until an agreement will be settled. Regrettable decisions can also be made that may cause financial and emotional harm. With a prenup, both parties can move forward swiftly to execute the outlined clauses.
No one truly knows what the future holds, which is why protecting one’s assets and financial future in the event of divorce is wise. A prenuptial agreement provides couples a level of open communication and control over their future instead of leaving it at the hands of fate and the courts.