People often misinterpret or misunderstand prenuptial (aka, antenuptial) agreements. Some people think that having one is a sign of insecurity about the marriage; others think a prenup is only necessary if one or both parties are extremely wealthy.
But the truth is that a prenuptial agreement is a powerful planning tool, not an indication that a marriage will end in divorce. And it can do much more than protect million-dollar properties and portfolios. In fact, you could have a lot more to protect than you think.
Protecting family
If you have pets, children from a previous relationship, or even reproductive material you’ve preserved in the hopes of starting a family someday, you have assets worth protecting with a prenup.
With a prenup, you can shield an asset from division if you want it to stay with your child; you can make decisions about pet custody; you can even decide whether one of you will keep reproductive material. Establishing these things in a prenuptial agreement can eliminate or at least minimize conflict if the marriage does, in fact, end in divorce.
Protecting yourself from debt
Millions of people carry debt from student loans, credit cards, and medical expenses, and many bring that debt into their marriage.
As this MarketWatch article notes, individual debts typically stay with the borrower in the event of divorce. However, if you will both contribute to paying the debt down during your marriage, you can use a prenuptial agreement as a basis for seeking reimbursement or compensation for your contribution to your partner’s debt should you divorce.
Protecting other partners
If you have a stake in a business, any partners you might have in that business could be exposed to financial repercussions if you divorce. A divorce could divide a business or require liquidation; it could affect customers, employees, and vendors.
Even if your business is a small start-up, it warrants protection with a prenuptial agreement.
Having an honest, open discussion
People are not always accurate judges of their assets; some overvalue property, others forget about an asset or write it off as insignificant. To get a fair assessment of your property and that of your spouse-to-be, have a frank discussion about these any other assets you may have before your wedding.
One last note, in Minnesota, the prenup can be signed one day before the wedding, but it’s wise not to wait until the last minute. Just like the marriage itself, a prenup is better not rushed.