A popular misconception is that prenuptial arrangements are only for the wealthy. Anyone who has personal assets, liabilities or property -- or children from a previous marriage -- should consider a prenup.
A prenuptial agreement can clarify the financial rights and responsibilities of each party during the marriage and the distribution of property in the case of divorce or death. Prenups can protect spouses from each other's debts. They can also spell out how one spouse's property can be passed on to children from a previous marriage. In addition, a prenuptial agreement can indicate whether one of the parties is to receive alimony.
What the prenuptial arrangement cannot cover is anything illegal. Nor can the prenup have a provision that goes against public policy. For example, future child custody rights cannot be arranged in the agreement. States consider the welfare of children a matter of public policy to be decided by the courts when a marriage ends.
Many experts believe that prenuptial agreements should be confined to financial issues. They suggest that nonfinancial matters, such as household and child-care responsibilities, be handled in other ways.
Usually, prenuptial agreements involve a time element. Most become effective on the day of the wedding and last indefinitely. For various reasons, some are designed to go into effect after a certain number of years have passed. Others contain a provision to end after the couple has been married a specified period of time.
Discuss the possibility of a prenuptial arrangement well before the wedding. Unromantic as the subject is, it's important to remember that finances are an integral part of the marriage partnership. Discussing these matters before you take your vows may prevent problems from developing later.
In addition to allowing sufficient time for planning, another basic rule in preparing a prenup is to be truthful about your financial situation. If one person hides something, this omission can make the agreement invalid. Be frank and honest -- in discussing not just your finances but what you want out of a prenuptial agreement. Both parties need to agree on the goals of the prenup.
Here is a checklist to help in planning a prenuptial agreement:
- Draw up a list of all assets, liabilities, and property.
- Identify important issues.
- Determine what your goals are.
- Be frank and honest in your discussions.
After these issues have been discussed, you then are ready to prepare the prenup. You'll have to decide whether to draw up the prenuptial agreement yourselves or to seek legal assistance.
To find out how preparing a prenup can be like writing your own vows, read on.