What’s A PRENUPTIAL AGREEMENT And Why Do You Need It?
Marriage can be a very long and intricate ceremony. While the main event lasts for days, there are a lot of things that go behind the scenes. These require a lot of time; sometimes this can take months! One of the important ‘behind the scenes’ that takes place before weddings is a prenuptial agreement.
Simply put, this is an agreement between the couple that states how the assets and debts will be distributed should there be a separation or death of an individual.
Each province has prenuptial agreement laws on what you can and can’t include in the agreement. Many provinces require couples to have this agreement recorded before getting married.
But, why’d you actually need it?
Why You Need Prenuptial Agreement
Contrary to popular belief, prenuptial agreements are not just for the affluent! Although it’s very popular on the wealthier side, prenuptial agreements can be pivotal for modest families. But, why would people need a prenuptial agreement in the first place? Here’s why:
- Clarifying financial rights: Couples may want to clarify their financial rights and their responsibilities during the marriage. Also, it helps in deciding how the assets will be divided should the marriage come to an end.
- Pass property to children from previous marriages: A couple having children from prior marriages can leverage the power of prenuptial agreements to pass on separate property to their children from previous children. If the prenup wasn’t signed, the living spouse might have a bigger claim to the assets while leaving very little for the children.
- Avoiding future agreements should there be a divorce: Something that starts will presumably end. This can be either if a partner dies or they agree to a divorce. During the time of divorce, there may be arguments over the division of property, eligibility of receiving alimony, etc. A prenuptial agreement can be used to clarify all of these between the couple beforehand. This eliminates any further argument should the marriage come to an end.
- Getting protection from debts: Prenups can be vital if you want to make sure that your spouse is protected from each other’s debts. Once this is declared, the remaining debts of a spouse won’t be pressurized on the other spouse’s shoulders.
Things To Know About Prenuptial Agreements
While prenups are very popular worldwide, it’s particularly very important in the North American subcontinent mainly because of the sheer percentage of divorce that takes place every year. To protect each other’s assets and spouses from debts, prenups can play a key role after filing for a divorce. However, there are a few things that you need to know about prenuptial agreements:
You Must Be Fair In The Agreement
Once the couple discloses the assets, the parties need to come to a fair agreement over the division of assets. This will be usually facilitated by an expert family lawyer who takes care of the whole process. By fair, it means that the division must be justified. Say, the husband has $2 million in assets while the wife has $1 million in assets.
Now, if the marriage ends after 20 years, and the couple accumulates more than $10 million in assets, it’ll be unfair for the wife to walk away with only $1 million that she had prior to marriage. This means that the prenup agreements must include the percentage of total assets that should be divided among the two partners.
Getting Your Own Counsel
Prenuptial agreements have a lot of details that couples must fill; there’s very little scope of mistakes. That’s why getting your very own legal counsel can be key in determining a fair agreement. For this, you must appoint an expert family lawyer who’d work in your best interests to bring in the best negotiation between you and your to-be spouse.
Premarital Assets May Not Be Included
During a prenup, there may be terms where any assets that individuals bring into the marriage are not included and remains the person’s separate property. If such an agreement is executed, any assets accumulated before the marriage will not be subjected to division. Any assets that the couple earn during the marriage will be divided in terms stated in the prenup.
Setting Terms For Alimony
Prenups can be extra helpful in setting the terms for possibly alimony. This means that if the terms are settled in the agreement, no party can claim additional alimony that’s more than what’s stated in the prenup. If the alimony is not stated, the couple can then ask for alimony given that all other terms align.
Children Are Not Included
Prenups can’t provide for or limit child support or any rights relating to children. This is because the courts and legislatures do not let couples bargain with the rights of their children and limit what support they’ll be getting.
Prenuptial agreements can be a great way of ensuring that there’s no scope of argument should the marriage come to an end. Not only does this include the division of assets, but it also includes the alimony agreement, protection from debts and much more!
Having a prenup prior to marriage may reduce tension between the couple and ensure a better understanding of the terms of marriage. This also empowers both the individual and helps them understand that no one is being worse off.
While prenups can be a very appealing thing, it usually requires a lot of steps and processes that must be legally recorded. For this, expert family lawyers must be consulted. Not only that, there are many more reasons on why you need a family lawyer to get on with your prenup. If you weren’t able to sign a prenup before your marriage, don’t worry. You can still sign up for a postnuptial agreement, that may be signed after marriage. However, that’s for another day!