10 reasons to have a prenuptial agreement
Updated On: Dec 13 2013 01:51:18 PM EST
By attorney Stacy Kemp, Special to THELAW.TV
When one hears the phrase "pre-nup," the image of a wealthy tycoon and a young swimsuit model comes to mind. However, a prenuptial agreement should be considered by every couple (regardless of income level) before they walk down the aisle. Here are 10 reasons why:
- Learn more about each other: Sure, you may know a lot about your fiancée. You wouldn't be getting married if you didn't. But do you know about their financial habits and history? Do you know about their debt? Often, people do not, and what's worse is that there is never a "good" time to have that talk. Discussing a prenuptial agreement gives you an opening to explore these topics in-depth and get to know each other's financial situation.
- Business relationship: Marriage is, at least in part, a business relationship. However, that does not mean it has to be a cold, calculating, multinational corporate merger. You can look at it as if it were your favorite folksy, charming local coffee shop partnering with the lovely, little ice parlor next door. Writing out goals, obligations, and expectations should be part of any good plan. It does not mean an absence of love.
- Future alimony: Many couples choose to have children and to have one person stay home and raise the child. While understandable, this creates two financial problems. First, the person who remains working must be able to support the family on one income. But, also, the person staying home is giving up future income. If this couple gets a divorce, alimony talks can go back and forth on "You chose to stay home because you didn't want to work" vs "I gave up my career, so I could raise our child." At this point, the parties are too emotional to address this issue. If this topic were addressed in a prenuptial agreement, the spectre of alimony should not need to be addressed.
- Property: Ask yourself, what do you think is the most likely way the average person would get property that is entirely paid off before they decided to marry? The answer is a relative, most likely a parent or grandparent. While having to pay a former spouse $10,000 in a divorce hurts, it is not as painful as having to sell granny's old farm because your spouse is entitled to a certain percentage of it. Granted, there are laws in place to protect inherited property at the moment, but they can always be challenged or changed. Address it beforehand.
- Cheaper, faster divorce: Have you ever seen a news story covering a celebrity couple's divorce? Ever notice how many of them take years to settle? Well, sadly, that situation is not "unique to the stars." Divorces even amongst average people can be very long, and the longer they go, the more expensive they get. Other than possibly time-sharing (child custody), money is the biggest reason for the continued battles. If you have your money situation spelled out prior to the marriage, the proceeding will likely go much faster.
- Abandon a bad marriage: "It's cheaper to keep her … or him" is an all too common phrase. People become so concerned over the possible financial ruin of a divorce that they will stay in a broken, loveless marriage for economic stability. Obviously, this not only makes both parties miserable, but can also have a tremendously bad effect on their children. If everything is written out fairly, then the fear of financial ruin is no longer there. With that fear gone, both parties can leave a failed marriage before any more damage is done.
- Control of your future: If you can help it, you do not want to be subjected to the courts. You may win, you may lose, but there's a lot of uncertainty there. Rulings can always be appealed. Take the time to map out a plan that is fair for you both while you both are looking out for each other's best interests.
- Protect your business: If you own your own business, a divorce can cause that business a number of problems. Protect it in a prenuptial agreement.
- Protect you from debt: Couples rarely just wake up one day and decide "let's get a divorce." It is usually something that festers over time, and during that time, people make bad decisions. A common one is racking up credit card debt, which can get very expensive in a short time. A prenuptial agreement let's your creditors know that the spouse who racked up the bill is the one who will be responsible for paying it after the divorce.
Protect children: Whether through death or divorce, second and third marriages are becoming more common. Sometimes these marriages suffer, because the children from the previous marriage(s) are skeptical that this "newcomer" is going take their inheritance. A prenuptial agreement can alleviate this fear.
The author, Stacy Kemp, is managing partner at the Tampa, Fla., law firm Kemp & Ruge Law Group.
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