A prenuptial agreement form is a legal agreement that is signed between the couples before they tie the knot and walk down the aisle. This agreement is separate from the emotional decisions and a necessity for every couple. This document should be signed by you and your partner in order to go through from any unexpected or unpredictable situation that occurs in the future.
Furthermore, most couples don’t understand the essence of this document. Since the number of divorces is increasing in the United States so couples must think over this matter and try to act prudently in this regard. The prenuptial agreement may sound indistinctly unromantic to you but it is an important document for your own safety.
Table of Contents
- 1 What is a prenuptial agreement?
- 2 Why should you sign a prenuptial agreement?
- 3 What to include in a prenuptial agreement?
- 4 The working of a Prenup:
- 5 Common clauses of prenuptial agreement:
- 6 Writing a prenuptial agreement:
- 6.1 Step#1; Include basic details of both parties
- 6.2 Step#2; decide on property
- 6.3 Step#3; decide on the business
- 6.4 Step#4; Agree on debts and taxes
- 6.5 Step#5; decide on housing agreements
- 6.6 Step#6; specify the final details
- 7 The advantages and disadvantages of prenuptial agreement:
- 8 Conclusion:
- 9 Faq (Frequently Asked Questions)
- 10 Is it possible to write a Prenup without a lawyer?
- 11 Can I get a Prenup after marriage?
What is a prenuptial agreement?
A prenuptial agreement is a legal agreement that is signed between couples before their marriage. This contract is used to decide on to the financial arrangements in between the spouse. It identifies what will happen in case of divorce or separation to the couple’s money, asset, and business. Moreover, it also establishes the rights for each spouse. The agreement sets out the following;
- The future earnings
- Possession of assets
- Potential division of wealth
- Other properties
According to a survey, in the US, 50% of all marriages end in divorce. The main purpose of signing this document is to protect yourself against future financial losses. The agreement is not just beneficial for wealthy spouses but also for the middle class and upper-class spouses. A prenuptial agreement plays a great role when it comes to protecting the rights of spouses.
Why should you sign a prenuptial agreement?
There are various reasons that why couples require signing the prenuptial agreement before the marriage. Some of them are as follows;
- It makes sure the protection of one party regarding the debts of the other.
- It identifies whether the property should be passed on after the death.
- The agreement guarantees to protect the specified assets of one party that they have selected.
- In the case of divorce, it specifies the property division.
- They simplify the financial responsibilities of the two parties.
- The contract also states who will inherit the property, money, and assets after the separation or divorce.
What to include in a prenuptial agreement?
For every couple and marriage, the prenuptial agreement varies on the basis of the specific situation. The following areas should be covered in the agreement;
- The contract indicates the property that should be considered separate among the couples. Before, inheritance, marriage, and personal objects, these properties and assets are acquired by the partners.
- It should define where the property and assets will go after the death of one of the spouse during the marriage or when they get separated.
- For the couple’s maintenance and support, it should specify the difference and preferences of couples. This is usually referred as spousal support. In case of divorce or separation, this is financial support that is given by one of the spouses.
- The agreement should clearly state that how the joint property that was bought together will be distributed.
- In case, the couple has children together after their marriage then who will be responsible to keep and support the child.
The working of a Prenup:
A Prenup is a legal agreement containing property’s division under marriage laws. The Uniform Premarital Agreement Act (UPAA) is followed by many states. This acts states the particular rules and guidelines for anyone making a premarital agreement.
In the document, you should clearly state that all the parties have to make disclosure of all their financial information full, fair, and honest.
Opportunity for legal counsel
Both parties must be represented by separate attorneys. However, in the document, the unrepresented party must also specify that they had an opportunity to consult independent counsel and chose not to.
There must a state-mandated waiting period occur in some states among the parties obtaining the document and signing the document.
Fair and reasonable terms
The unconscionable contract is grossly unfair or having unreasonable or impossible terms. Such type of contract isn’t enforced by the courts.
Signatures and notarization
It is essential for both parties to sign the prenuptial contract, however, this type of specific requirements may vary from state to state. This document should be notarized and at least one impartial party witness it.
Common clauses of prenuptial agreement:
Here are the most common clauses of prenuptial agreement;
Identification of debts and assets
Before the marriage, you should determine separate property and significant debts owned by each partner. This way, you can make sure that they both keep ownership in the event of a divorce. The separate property ownership ends with the beginning of the marriage as per most marriage laws. In case, a partner have to prove ownership of particular assets then a divorce can become disputable.
During the marriage in most states, anything bought or earned becomes the property of both parties. When you get a divorce, this property will divide in a 50/50 split as per the community property law. The agreement must clarify if you and your partner want to divide community property differently.
There is an opportunity for both parties to agree on a specific amount for spousal support. Through mutual consent, they can waive it. If a Prenup doesn’t provide an advantage to one party then the court will not enforce it.
The infidelity clause
An infidelity clause is considered as a molarity clause which is also included in some prenuptial agreements. In case, a reason behind the divorce is an extramarital affair then the cheating spouse have to provide compensation such as monetary sum.
Writing a prenuptial agreement:
Here are the steps to consider for writing a prenuptial agreement;
Step#1; Include basic details of both parties
Providing the basic details for both parties is the first step in writing a prenuptial agreement. This information will split between the first and second spouses. Include the following details regarding them;
- Complete name
- Contact details
- Spouses’ marital background
- Legal representation
- Financial disclosures
They should also state whether they have been married before and/or if they have children. Separate premarital property is shared with the children that you have from another relationship.
Step#2; decide on property
A property that is owned before marriage
It’s up to you whether you make all your prior property as separate or shared, or a mix of both. Consider the following tips if you have anything before marriage;
- It would be better to keep it separate so that only one person contain ownership of it.
- You can also keep some as separate and some as shared marital property.
- If you want that both of you become owners then make it as shared marital property.
Division of marital property
The property’s division can be set by percentages or you can divide it as per state of law. A judge will make decision for the couples who cannot agree on dividing property. In case, they do not indicate how the property will be divide then on the basis of various factors the property will be divided equitably or fairly.
Step#3; decide on the business
Business owned prior to marriage
Before marriage, if you own a business it’s up to you whether during marriage you want to share or not share any future increase in the value of a company.
Business acquired during marriage
You can share or not share any future increase in the company’s value in case you or your spouse starts or inherits a business during marriage. You can consider the following options for dividing rise in value;
- Granted to the first party
- Granted to the second party
- Shared equally
- Divided by percentage
Step#4; Agree on debts and taxes
In this step, you have to discuss about the following;
- Debt owed before marriage
- Debt acquired during marriage
- Division of marital debt
- Taxes during marriage
Step#5; decide on housing agreements
In case, your marriage ends specify how the marital home will be distributed. Consider the following options for making this decision;
- The first party’s separate property
- The second party’s separate property
- Both parties’ shared marital property
Division of household expenses
Make a decision that during marriage how you and your partner will share household expenses. Consider the following options;
- Paid entirely by the first party
- Paid entirely by the second party
- Paid equally by both parties
- Every party will pay particular expenses
Step#6; specify the final details
Here, you need to discuss the following;
- Waiver of rights
- Disability and death
- Additional clauses
- Financial disclosures
- Dispute resolution
- Notary Acknowledgements
- Date and governance
The advantages and disadvantages of prenuptial agreement:
Let us discuss below the advantages and disadvantages of the prenuptial agreement;
We usually see that couples fight due to financial problems. It doesn’t matter how much they love each other, ones there comes a time when they will fight over financial issues in case they are facing any. With the help of prenuptial agreement, you can resolve these financial problems. It assists you in discussing financial matters down the road. It also makes sure about your financial security.
In different cases, we see that where one partner is frugal and responsible about spending money whereas the other one spends irresponsibly. So, in this situation, the spending habits should be considered. By filing this agreement, the one who did not spend much and saved money do not get penalized or punished.
This agreement is highly beneficial for children. During the marriage, when spouses have children they have to be looked after if they are getting separated or divorced for any reason. Children are their responsibility so you should decide on who will take their charge for their financial matters. This way, they are not left unattended after the death or divorce of their parents.
The agreement can be beneficial for different reasons but it may erode the trusts among both of them. For instance, signing this contract does not make sense if the partners are young and have started with equal contributions. This may erode their trust upon each other. It can also make the any one of the partners suspicious about their motives.
Inefficient to cost
According to some of the experts, when the couple takes a divorce, the prenuptial agreements prevent costly litigations. However, according to some of the advocates, most of the lawyers setting aside partners agreement and this results in zero cost saving. The partners who are less wealthy and have irregular terms and conditions, usually happen to them.
Lack of faith
It doesn’t matter how much you love your partner by signing a prenuptial agreement, you are questioning their honesty. Hence, this can state that the lack of faith and trust among you both. This may also indicate that you are insecure about their relationship, therefore, you are filing this contract. When you wish to protect yourself more than your partner then they will judge you and your commitment towards them.
In conclusion, filing a prenuptial agreement form protects yourself from future losses in case after your marriage any unexpected or unpredictable situation occurs. This agreement protects the assets of the spouses in case of separation or divorce.
Faq (Frequently Asked Questions)
Is it possible to write a Prenup without a lawyer?
Yes, it is possible to write a Prenup without a lawyer because it isn’t a legal requirement that you hire a lawyer to write this agreement. However, you can hire a lawyer for reviewing your document in order to make sure that your state’s requirements are followed.
Can I get a Prenup after marriage?
When you get married the different rules comes into play regarding ownership and division of the property. Hence, you can’t get a Prenup after marriage. However, you can a postnuptial agreement when the parties are married.