When you enter into a marriage, you never go into it thinking that it will end in a divorce. Sadly, this is not always the case; research has indicated that one divorce occurs every 13 seconds in the United States. This might account for the increase in prenuptial agreements that the American Academy of Matrimonial Lawyer saw during a survey of attorneys, where 62% of lawyers polled saw an increase in the total number of clients seeking prenuptial agreements in the last three years.
So what is a prenuptial agreement? A prenuptial agreement is a legally binding contract between two people before they marry. This contract can address different issues that might be brought up throughout the course of the marriage, such as the property brought into the marriage by each party and the property they have together. It makes sure assets are divided in a way that the couple sees fit in the event of a divorce.
Getting a prenuptial agreement isn’t just for the wealthy. There are multiple reasons to consider getting a prenuptial agreement written up before your marriage, even if you don’t have a large net worth. Check out some of our top reasons below:
Protect Your Assets
Divorce laws in each state can regulate what is a martial assets and what isn’t. The easiest way to keep these separate is by having documentation of the items you entered into the marriage with. A prenuptial agreement is a great way to go about documenting these items, because it also will help ensure that you get to keep these things in the event of a divorce. These assets can include, but are not limited to:
- Retirement benefits
- Bank accounts
- Family inheritances
Write down a list of your assets that you will be entering into the marriage with and ask yourself this question: “If I get divorced, will I be ok if any of these things are taken away from me?” If the answer is no, it would be a good time to discuss a prenuptial agreement with your significant other.
Don’t Let Their Debt Become Yours
What would you do if you found out that your spouse had incurred thousands of dollars in debt since you had gotten married? If a prenuptial agreement is in place, it can ensure that you aren’t liable for your spouse’s debts if you are separated and not yet divorced, whether it be credit cards, unpaid loans or money owed from gambling. If there is an agreement not in place, creditors can go after property obtained in the marriage even though only one spouse is the one in debt.
In states that follow the rules of community property, debts incurred during the marriage by either spouse are owed by both parties. It’s important to note that if you are in debt before the marriage, such as loans from continuing your education or taking out a loan for a vehicle or home, it doesn’t automatically become a joint debt.
Negotiate Settlements Before It Gets Messy
A divorce is obviously a very emotional and stressful time for all parties involved, and emotions have a way of getting the best of people. If a prenuptial agreement isn’t in place, the division of your assets will depend on which state you and your spouse reside in. Each state has its own set of rules, but most will divide assets in one of two ways. The first way is division of equitable property, where assets are divided on an equitable basis and non-marital assets that you came into the marriage with are yours. The other is known as division of community property, where all assets are divided in a 50/50 split. Both Iowa and Nebraska have adopted the Uniform Premarital Agreement Act, also known as UPAA, which sets a standard for the rules governing how premarital agreements are enforced. Agreements must be in writing and signed by both spouses, and they need to sign any other documents necessary to carry out the terms of the agreement, such as life insurance policies or wills.
If a prenuptial agreement wasn’t signed before the marriage, you are still able to get a postnuptial agreement. This document is signed after the couple is married and, like a prenuptial agreement, can detail separate and martial property and decisions on what would happen with the property in the event of a divorce.
When discussing with your significant other whether or not to get a prenuptial agreement it’s important to remember that this is just a form of insurance to protect all parties in a marriage. Signing a prenuptial agreement is like getting insurance for your car or your home – you hope that you will never have to deal with using it, but it is there in the case that you do. While it might not be the most romantic decision you and your spouse will make throughout your lifetime, it is one of the safest. If you are looking to speak to a lawyer about starting the process of a prenuptial agreement, please contact our office today.