What's Covered Under a Prenuptial Agreement?
A prenuptial agreement is a contract entered into between two people before marriage to settle financial issues in the event of a divorce or death. A well-crafted prenuptial agreement can be the best way to safeguard premarital assets, and to specify how assets acquired in the future will be distributed.
Prenuptial agreements can address the following financial issues:
- Division of premarital property and assets
- Spousal support
- Child support
- Inheritance rights
- Financial interests related to family businesses and premarital property
- Division of assets acquired during the marriage
- Protecting all children in "blended families"
Do I Need a Prenuptial Agreement?
Not all couples need to sign a prenuptial agreement before getting married. If both people are getting married for the first time, have similar incomes and assets, and no children, there is less need for one.
Prenuptial agreements are much more important for couples who are older and more established, and have accumulated sizeable assets before the marriage. Many people entering into a second marriage choose to sign a prenuptial agreement to make sure they maintain complete control over the distribution of their premarital assets, especially if they have children from a previous marriage.
There are situations where a prenuptial agreement is appropriate for a younger couple entering into their first marriage. If there is a major disparity between the assets of the two people, or if one person wants to protect a large inheritance or a family business, a prenuptial agreement may be an excellent idea.