What is a Prenuptial Agreement?
A prenuptial agreement, also known as a premarital agreement or prenup, is a binding contract that outlines how a couple will handle the financial aspects of their marriage. A prenuptial agreement works to establish the property and financial rights each spouse will have in the event of a divorce. In most cases, a prenuptial agreement contains a list of each party’s individual assets, guidelines on how property will be divided in a divorce, responsibility for debts acquired before and during the marriage, and the amount of spousal support that will be payable (if required) should the marriage end. As experts in family law, Linley Welwood knows how complex prenuptial agreements can be. That is why we have provided some information to help you understand what a prenuptial agreement is, what can happen if you do not have one, and why they are beneficial for some couples.
What Happens if You do not Have a Prenuptial Agreement?
Marriage is a binding contract between a couple. As part of this contract, there are standard property rights for each spouse. In the absence of a prenuptial agreement, a spouse usually has the right to:
- Claim property acquired during the marriage with the expectation that the property will be divided equally in the event of divorce.
- Incur debts during the marriage that the other spouse may be equally responsible for.
- Share the management and control of any family property. This can include the right to sell it or give it away as a gift.
3 Reasons to Sign a Prenuptial Agreement
Prenuptial agreements can be extremely beneficial for couples for a variety of reasons. Prenuptial agreements can help if:
1. You Want to Protect Your Inheritance
If you anticipate inheriting money, property, or other assets from a loved one in the future, a prenuptial agreement can ensure that any gifts received remain in your sole possession.
2. You Have Prior Debts
You or your spouse may have outstanding debts prior to your marriage that will need to be resolved in the future. A prenuptial agreement can specify who these debts belong to and designate how they must be paid in the event of divorce.
3. You Own a Business
If you or your spouse own a business, a prenuptial agreement is strongly recommended. Without a prenup, the person who owns the business may find themselves forced to give up their entire business or a portion of it to their ex-spouse.
To learn more about our prenuptial agreements or other areas of family law, get in touch with the experts at Linley Welwood. We can be reached through our online contact form and will be happy to answer any questions you may have regarding our services or your situation.