A prenuptial agreement, or prenup, is one that is entered into before marriage. It provides for the parties’ rights during the marriage, after a death, and after a divorce. If an individual gets divorced and does not have a prenup, state law may determine who receives what marital property (e.g. the house, the car). With a prenup, however, you can decide how to divide assets beforehand, making it a smoother and faster process for everyone involved.
In addition, someone with children from a previous marriage can use a prenup to specify how assets will pass to those children in the case of death. This is an important consideration because if a certain percentage of the estate is to go to children from a previous marriage, a prenup is required to prevent separate assets from becoming a part of the marital property. In other words, without a prenup, a surviving spouse may receive a larger portion of the estate or inherit specific property, such as precious heirlooms, that were intended for the children.
While prenuptial agreements have often been criticized as a “plan for divorce,” entering into marriage with a clear understanding of each other’s finances can help couples create a solid foundation built on honesty and peace of mind.
Spouses-to-be can begin prenuptial planning by discussing and reaching a consensus on the purpose of the agreement as well as the general terms that each finds important. It is then a good idea for spouses to list the assets each owns and debts each owes, along with approximate values. It is recommended that each spouse hire a different lawyer to get independent advice on the terms of the agreement. From here, the parties and their lawyers will review and suggest changes until each is satisfied and feels ready to sign the agreement.
Entering into a prenuptial agreement can be a practical and responsible thing to do to ensure your family is cared for in the event that something unexpected should happen. The Law Group of Northwest Arkansas will be happy to work with you to create a fair, and enforceable, agreement.