A prenuptial agreement, or prenup, is a pragmatic solution for many couples planning to marry when finances are a concern. While discussing a prenup might not seem romantic, it is a tool for protecting both parties’ interests, particularly in complex financial situations. Keep reading for some key scenarios that couples should consider a prenuptial agreement.
There are Substantial Assets or Debts
If either you or your future spouse has significant assets such as real estate, investments, a business, or substantial savings, a prenup can help clarify what happens to these assets if you divorce. On the other hand, if one party carries significant debt, a prenup is also a good idea because it can protect the other party from being responsible for this debt should the marriage dissolve.
You Have Children from Previous Relationships
For those entering a marriage with children from previous relationships, a prenuptial agreement can safeguard inheritances and assets intended for these children. It ensures that specific assets are allocated to your children and not affected by the distribution of the marital estate.
One Partner is Much Wealthier
If there is a significant disparity in wealth between you and your partner, a prenup can ensure fair terms in the event of a divorce. It can provide peace of mind for the wealthier spouse and security for the less wealthy spouse. One way to do this is through stipulating support terms and asset division in advance.
Ownership of a Business
If you own a business, it’s crucial to protect this asset from the complications of a potential divorce. A prenuptial agreement can determine what happens to your business and its assets in the event or a divorce. It can ensure that business operations are not disrupted and that the business does not become divided or subject to property division proceedings.
Anticipating a Large Inheritance
If you expect to receive or have already received a substantial inheritance, a prenup can ensure that this remains your separate property. This is especially important in California, a community property state, where marital property is divided equally in a divorce.
Pursuing Advanced Education or Career Sacrifices
If one partner plans to support the other through advanced education, or if one is sacrificing a career to tend to the marital home or children, a prenup can specify financial arrangements to compensate for this. This could include stipulations for spousal support or other compensations if the marriage ends.
How Kendall Gkikas & Mitchell, LLP Can Help
At Kendall Gkikas & Mitchell, LLP, we understand the sensitivities around discussing and drafting prenuptial agreements. Our experienced attorneys are here to provide compassionate guidance and expert legal counsel to ensure your prenup is fair, enforceable, and tailored to your specific circumstances. If you’re considering a prenuptial agreement, or if you’re unsure whether it’s the right step for you, contact us at 909-482-1422 to schedule an initial consultation.
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