What is a Prenuptial Agreement and How Do They Work?

Getting married can be one of the most exciting points in your life, but legally binding yourself to another person also comes with a number of risks. Those who fail to protect their assets might find themselves struggling with a complex court case that ends up costing them huge sums of money. Here is a quick look at exactly how a prenuptial agreement works and some of the pros and cons of these contracts.

The Basics of a Prenuptial Agreement

This type of contract is a legal agreement between two parties that can be signed just before getting married. They generally contain information such as which person receives various possessions and assets in the event of a divorce. Many couples also include information about alimony and child support from previous marriages. Prenuptial agreements are often combined with other legal and financial documents including wills, life insurance policies, and living trusts.

Who Needs One?

While many people believe that prenuptial agreements are only needed when one of the partners has a large estate or considerable assets, these contracts can be beneficial in quite a few different scenarios. Professionals, like those at Bineham & Gillen, PLLC, know that many couples decide to sign these contracts if one of the parties has a significant amount of debt in their name. They might also want to consider one of these agreements if one of the parties has a child from a previous marriage or with another partner.

Pros and Cons

The biggest benefit of a prenuptial agreement is the fact that the couple will never have to worry about their finances if a divorce takes place. They can both rest assured that their personal assets will be protected and they will not be liable for any of the other party's debts. Unfortunately, some people believe that simply bringing up the idea of a legal contract that includes information about a potential divorce indicates a lack of trust.

Alternative Reasons to Sign a Prenuptial Agreement

One of these agreements can be drafted with absolutely no clauses involving alimony, assets, or child support. A prenuptial agreement is able to protect a child's future financial stability in the event of a parent passing away. If one of the spouses owns a small business that they have invested a large sum of money into, then a prenuptial agreement can be used to protect the other spouse and children if the business fails.

Deciding whether you would like to sign a prenuptial agreement is a very personal decision that you and your partner will need to discuss. Those who are still unsure if they need a prenuptial agreement should speak with an experienced family attorney who will be able to provide them with more information on exactly how these contracts work and what the benefits will be.