Many engaged couples typically have a “to-do” list of all the things they need to do as they are planning their wedding. Activities such as finding a reception venue, choosing a caterer, and picking a wedding photographer are usually high on the list. An activity that more and more couples are adding to their list is drawing up a prenuptial agreement.
What Is a Prenup?
A prenup is a legal, written agreement that clearly states how the couple’s assets will be divided in the event of divorce or death. Other issues a prenuptial agreement can clarify are the financial responsibility of each spouse during the marriage and how potential disputes will be resolved.
Prenuptial agreements have gained popularity over the past few decades, but what many people may not realize is that they have actually been around for centuries and were a common standard utilized by European royalty. There is even evidence that the families in ancient Egypt negotiated prenuptial agreements for their children who were marrying.
In the past, many couples were under the assumption that premarital agreements were only for people who were wealthy, but today, that is simply not the case as more and more couples from all income brackets are choosing to take the step in obtaining a solid prenup before they walk down the aisle.
Prenups are especially important to have for couples when there is a business owned by one or both spouses or if one or both spouses already have real estate they own. Prenuptial agreements also offer protection for couples who have children from prior relationships.
In order to ensure your prenuptial agreement will be legally binding in the event you divorce, it is critical that both parties obtain their own separate and independent legal counsel. It is also a good idea to begin this process months before the wedding takes place.
Each future spouse will need to provide a list of all their assets and debts. They will also need to decide how separate and marital property will be divided if they split up. This process can also give both parties keen insight into each other’s true financial standing, as it is not uncommon for one person to not fully disclose financial information to the other – especially when it comes to debts.
For couples who are already married and did not have a prenuptial agreement drawn up, there is the option of having a postnuptial agreement done. A postnuptial agreement process is the same as a prenup, with both parties retaining their own attorneys and negotiating how assets would be divided if the marriage fails. This document is just as legally binding as a prenuptial agreement, the only difference being it has been signed after the marriage has taken place instead of before.