Benefits of Prenuptial Agreement
Statistics have shown that Millennials are getting married at a later age then previous generations. Many are waiting until they enter their thirties before marrying because they feel they have become financially secure at this point and are ready to start a family. Additionally, many people that have been previously married and are entering into a new marriage may come into the new marriage with assets they have accumulated in their adult life.
With this in mind, people entering into a marriage that already have personal assets should consider a prenuptial agreement prior to the marriage. Commonly referred to as a prenup, this contract protects the assets of the party entering into the marriage in the event that the marriage ends in divorce at a later date.A Prenuptial Agreement Isn’t Always About Divorce
One of the first things that attorney Holly Hefton tells clients is that a prenup isn’t always about divorce. This type of agreement is beneficial if a divorce occurs in the future, but it also is very beneficial if either party has a family from a previous marriage.
Parts of the prenuptial agreement can help your estate planning. If you want to make sure that your children from a previous marriage receive part of your assets, this agreement can establish this fact prior to the marriage. This can also help protect any assets that may be promised to the person and will not be received until a date when the person is already married.
This type of contract can also establish special circumstances for the marriage or a divorce or determine how specific situations will be handled once the marriage takes place. For instance, the agreement may state that the couple must have a child within the first three years of the marriage or agree to divorce after that period of time. However, attorney Holly Hefton recommends that these types of agreements be used more for asset allocation than personal requirements.
In the event of a divorce, having a prenup will also allow you to have it pre-established what is community property and what is personal property. This will help you reduce the costs and time associated with completing a divorce.
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