The Pros and Cons of Prenuptial Agreements

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There are key elements that can help any marriage be as successful as possible. One is that the couple is able to communicate effectively about their personal and joint goals. Another is that they are able to express love, understanding and respect for one another at all times. But for some couples, it is just as important to determine how they will manage their assets in the event of a divorce. For those who choose to put their decisions in writing, they agree to sign prenuptial agreements.

The Basics of a Prenuptial Agreement

Prenuptial agreements are contracts between two people preparing to marry one another. In the contract, they want to determine before entering the marriage how their assets will be distributed in the event that they divorce or one partner dies. For many, the idea of drawing up a contract can bring hard feelings between the two. But if one partner is realistically concerned about protecting his or her assets, then it is still a good idea to consider the prospect.

The Pros of Prenuptial Agreements

A few pros of signing prenuptial agreements include being able to protect your home, retirement funds, stocks, or a business. Additionally, if you have children or grandchildren from a previous marriage, you can make sure they stay in your custody after the divorce. And if you are receiving an inheritance, are much wealthier than your partner, or are seeking a degree in a lucrative profession, you can make sure your current and even some future assets are protected from substantial alimony payments.

The Cons of Prenuptial Agreements

On the other hand, there can be cons to prenuptial agreements, especially if you are the person who has been asked to sign one. For instance, signing one could eliminate your right to inherit a portion from your spouse’s estate if he or she dies. Or you may contribute significantly, yet not contractually, to your spouse’s business only to find you don’t reap any financial rewards after you split. Additionally, if your partner earns a significantly larger wage than you and you are accustomed to a certain lifestyle, you may find that because you signed the agreement you will not be entitled to this lifestyle if you divorce.

There is much to consider before tying the knot, and prenuptial agreements are often among the considerations. But if you determine realistically the pros and cons, your joint decision may work better than you think.

Considering marriage? You might want to consider a prenuptial agreement.

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