If Marriage is Partially a Business, Have You Considered a Prenuptial Agreement?

Contrary to popular belief, prenuptial agreements are not just for the wealthy. Due to the high divorce rate in the United States and the costly litigation that typically ensues during the divorce process, prenuptial agreements are becoming attractive to a broad array of engaged couples. While many are reluctant to propose a prenuptial agreement to their future spouse, a prenuptial agreement can provide both parties with insight into the finances of their future spouse and provide a level of certainty should the marriage come to an end. Regardless of your socio-economic status, prenuptial agreements should be considered just as crucial to the marriage planning process as attending pre-marital counseling. If you or a loved one is engaged to be married, consider these five reasons for entering into a prenuptial agreement:
Future Alimony
Oftentimes, a couple will decide that one spouse will stay home and raise the children while the other spouse continues to work. The spouse that stays home to raise the children, however, takes a significant financial risk, especially if the marriage ends in divorce. First and foremost, the spouse that stays home to raise the children gives up future income and likely will find it difficult to re-enter the workforce. A prenuptial agreement can give the spouse that stayed home to raise the children certainty regarding the amount and length of time that she will be entitled to alimony if the couple divorces. By agreeing to this alimony schedule in a prenuptial agreement, both parties can avoid the uncertainty created by leaving such decisions in the hands of a court.
Ownership of a Business
If you or your future spouse owns a business, a prenuptial agreement is an absolute requirement. A prenuptial agreement can protect the company’s assets and avoid the prospect of your spouse being entitled to all or a portion of the company. Also, if you have business partners, a prenuptial agreement that clearly excludes or provides your spouse with other assets in lieu of the company’s assets can give you and your business partners certainty that the business will not be disrupted or forced to liquidate assets.
Assets That You Want to Protect
If you or your future spouse has assets that you want to protect, such as a significant retirement fund account, family heirlooms or collectibles, then a prenuptial agreement is critical to ensuring that those assets do not become marital property and subject to marital distribution. Again, a prenuptial agreement can protect these assets and give you certainty should you be unfortunate enough to experience a divorce.
Children from Another Relationship
Another reason to consider a prenuptial agreement is when you have children from another relationship. Because it is not uncommon for people to have children from other relationships, a prenuptial agreement can provide those children with certainty that they will not be disinherited if you pass away. If drafted correctly, a prenuptial agreement offers an extra layer of protection to those pre-existing children and can ensure that they receive the assets you intended for them to receive.
Debts of Your Spouse
Prenuptial agreements also can provide certainty regarding whom will be responsible for debts following divorce. With the prevalence of student loans and the increasing debt load being shouldered by many Americans, it is not uncommon for couples to enter into a marriage with a significant amount of pre-existing debt. A prenuptial agreement can separate debt clearly between the spouses and protect a spouse from being responsible for the debts of their future spouse. In short, if your spouse died tomorrow and you did not have a prenuptial agreement in place that addressed this issue, you could be responsible for their debts.
While prenuptial agreements cannot address all issues, such as child support, it can address other key issues that, in the midst of a divorce, typically would require the expenditure of significant sums in legal fees. Prenuptial agreements provide certainty to couples planning to get married, minimize the cost of divorce proceedings and provide each party with a full window into the finances of their future spouse.

Disclaimer: This article is made available for educational purposes only and to give you general information and a general understanding of the law, not to provide specific legal advice. The article’s content should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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Written by Law Firm of J.W. Stafford, L.L.C.

Attorney Jamaal (“Jay”) W. Stafford has extensive experience counseling and representing clients facing complex and challenging legal issues. He puts his experience to work with each client to help them get their desired results, no matter what legal situation they are facing. Each service that is offered is backed by his experience, education, professional training, and passion for employment law and litigation.