Prenuptial Agreements Protect Assets

Many people associate prenuptial agreements with the very wealthy. However, the need for prenup contracts is not limited to those who have amassed significant wealth. People from a wide variety of socioeconomic backgrounds choose to draft and sign prenup forms prior to marriage.

Even though completing legal documents regarding what will happen when or if a marriage ends isn’t the most romantic aspect of preparing for a wedding, a prenuptial agreement can be very beneficial.

There are many circumstances under which prenuptial agreements are advisable. Individuals who have children or who have accrued assets on their own often choose to enter into a prenuptial agreement when getting married.

Prenuptial agreement forms can be very beneficial for those with significant assets, such as:

• Business ownership

• Expectation of Inheritance

• Home ownership

• Retirement funds

• Stocks, bonds, mutual funds

Prenuptial Agreements Can Specify Division of Future Earnings

Many people think that prenuptial agreements are only needed when one or more parties to a marriage brings significant assets with him or her into the union. However, this is an incorrect assumption. Prenuptial agreements don’t have to be limited to specifying division of assets that exist prior to marriage, and often are not. A number of situations warrant prenuptial agreements even when neither party has assets at the beginning of the marriage.

One of the most common prenuptial agreement examples involves situations in which one partner supports the other through graduate or professional school. Even though neither partner is moneyed at the outset of the marriage, the supportive actions of one partner can have a significant impact on the financial success of the other. In such a situation, the lifetime earning potential of the partner who earns the advanced degree is often much greater than that of the other partner.

Without a prenuptial agreement, however, the partner who earned the higher education isn’t likely to be obligated to share his or her earnings with the other party in the event of a divorce. However, prenuptial agreement forms could have protected the interests of the supporting spouse by specifying terms for spousal support.