Certain things stand out among the rich and famous when they get married. Not only are they likely to extravagant weddings, but also these individuals are highly likely to have a prenuptial agreement in their union. While these documents are used to protect one's fortunes, today, they do much more than that. Therefore, these marital legal documents are not just for the wealthy.
What are the benefits of a prenuptial agreement? Although some view planning for a divorce to be negative or even cynical, it is considered to be a smart move. A divorce can leave a person in a worse off position and without the assets and property he or she would want to leave the marriage with. Even if one believes that divorce is extremely unlikely, it is still important to plan and prepare for this event.
There are many financial concerns. One does not only fear having their asset split up as marital property, but they also are concerned that creditors will come over his or her assets for the debts of a former spouse. Much like assets and property are deemed marital property, debts can be treated the same way. It would be horrible to face the penalties and consequences for the unpaid debts of a former spouse.
Another major benefit of a prenuptial agreement is its ability to aid with estate planning. This often difficult process can be made easier when steps have been taken to ensure certain assets are kept as separate property. This ensures that property is passed on to the proper heir or beneficiary.
Because life can change unexpectedly, it is important to note that a prenuptial agreement might not always be relevant. Modification might be necessary, causing married couple to consider a postnuptial agreement. This ensures that the wishes of both spouses are memorialized in the document and any changes are addressed.
Whether protecting oneself in case a divorce occurs, or currently going through the dissolution process, it is important to understand how a prenuptial and postnuptial agreement could impact a divorce decree. Additionally, spouses should take the time to understand their rights and how best to proceed with the situation.
Source: Nerdwallet.com, "You're Married, but Your Assets Don't Have to Be," Liz Weston, Feb. 15, 2018