If you are getting ready to walk down the aisle, you should consider whether you could benefit from a premarital agreement. Contrary to popular belief, premarital agreements are not just for the mega-wealthy or celebrities. People marrying later in life and people marrying for a second or third time could often benefit from a premarital agreement.
What are the benefits of a premarital agreement?
Disagreements about the management of finances rank among the top reasons for divorce. Depending upon the source, it’s said that 40-50% of first marriages end in divorce, and the divorce rate for second marriages is even higher, at 60-70%.
If you are going into your marriage with a retirement account, inheritance, a house, or children from a prior marriage, you should talk to a family lawyer about protecting your assets and your children with a premarital agreement. Even if you intend to share what is created during your marriage with your spouse, you can at least protect the assets you brought into the marriage in the event of a divorce.
What can a premarital agreement include?
A premarital agreement can cover any issue as long as it does not violate public policy or criminal laws, negatively affect a child’s right to support, or defraud a creditor. Some common purposes of a premarital agreement are to:
- To preserve a client’s business and business income as separate property;
- To identify and preserve property and accounts, and income from those accounts, as separate property;
- To eliminate or limit temporary spousal support or post-divorce spousal maintenance; and
- To keep a party’s income earned during the marriage separate and require a party to pay his or her own debts.
Isn’t this idea unromantic?
With money problems ranking high on the list of reasons why marriages fail, you could view it as a way to prevent conflict by getting difficult money management issues out on the table. If you and your fiancé both have retirement accounts and other assets to protect, your fiancé may be more open to the discussion than you expect. The key is to start the discussion as early as possible, before or shortly after your engagement, so you have plenty of time to discuss the assets and income you want to protect. It is also possible to draft a premarital agreement that provides more benefits to your spouse the longer you are married.
If you would like to learn more about how a premarital agreement could protect your property and income, we would love to hear from you. Contact us at 469-998-4830 to schedule a confidential consultation.