Although marriages do not begin with the anticipation of divorce, it is increasingly common: 50 percent of first marriages, 67 percent of second and 74 percent of third marriages end in divorce. (Source: Forest Institute of Professional Psychology.) When your net worth is at stake, it is critical to be prepared with a prenuptial agreement, commonly referred to as a “prenup.”
No longer for the wealthy only, prenuptial agreements can be smart financial planning tools for all marriages but are especially common in second and third marriages, for business owners and/or when one partner has a large inheritance (received or expected in the future).
The goal of a prenup is to reduce the potential future conflict and unnecessary financial burden in the unfortunate event of divorce. By defining what will happen with asset division and spousal support before the marriage, couples have the opportunity to consider the financial and legal ramifications of marriage before walking down the aisle. Prenuptial agreements can also protect one spouse from the other spouse’s existing or future debt, detail asset division to previous children upon either spouse’s death, etc.
Even if you are already married, the courts will also enforce and honor postnuptial agreements, which can materially impact the parties’ rights. Postnuptial agreements, like their prenuptial brethren, can allocate and carve out each spouse’s rights and property in any way that is mutually agreeable to the two spouses even after they have married.
Why do people sign prenuptial agreements?
Many people sign prenups for a variety of reasons including:
Keep finances separate
Protect each other from debt
Provide for children from other marriages
Clearly define property division if divorce occurs
Clarify responsibilities during marriage
Estate planning tax efficiencies
What Can Be Included In a Premarital Agreement?
The law demands that a prenuptial agreement be voluntary, in writing and signed by both parties. It also establishes requirements for the content of such agreements and requires complete disclosure of property and financial obligations prior to marriage in order to be enforceable.
In creating your premarital agreement, the law allows couples to address a broad spectrum of issues. The most common concerns addressed in a premarital agreement are:
Rights regarding the property of one or both parties
The disposition of property, upon separation, divorce, death or other circumstance or conditions defined by the parties
Spousal support, and whether support will be waived
Can a Prenuptial Agreement Be Altered After Marriage?
A premarital agreement may be amended or revoked after marriage only by a written agreement signed by both parties involved. Under law, married couples may enter into agreements with each other regarding their marital assets and obligations in the same way and to the same extent as prospective spouses or private parties.
Canterbury Law Group was founded to provide no-nonsense legal counsel for Family Law cases at the highest levels possible. We are an energetic and unified team of lawyers and paralegals deeply committed to solving our clients’ life changing problems. We handle complex cases throughout the United States with an emphasis on Arizona, California and Nevada cases.