What Are the Pros and Cons of Prenup Agreements?
When you fall in love with the right person, all you can think about is spending the rest of your life with them. It gets even more exciting when both of you agree to become married. There is so much to plan out such as the wedding reception, the types of food to serve to guests, and where you plan to live together in Boston. Yet another agreement that may need to be discussed before the wedding day is the prenup.
What is a Prenup Agreement?
A prenup agreement is a notarized contract that is made between two couples before they are married. The contract provides financial details regarding all the assets that each couple will be bringing into the marriage. These assets can involve businesses, real estate, stocks, inheritance from parents and previous marriages, earnings from a lucrative career, and a range of other financial assets. The agreement will talk about the ownership rights each person has to these assets and property (as well as debts) in the event that there is ever a divorce if you don’t want the courts to assign ownership during a divorce case.
Why is a Prenup a Good Idea?
A prenuptial agreement is a good idea for people who are looking to protect the inheritance rights of their children or grandchildren who may come from a previous marriage. It ensures that the children will still remain the beneficiaries to your wealth. A prenup agreement may also be appropriate when you are getting involved in a business venture where you do not want to have your former spouse gain ownership control when the marriage ends. A prenup can also discuss other financial details, including the amount of spousal support that the ex-spouse can get when you have a profitable and wealthy career.
Another reason that a prenuptial agreement may be an advantage is when one person is bringing any large debts into the marriage. These debts may be student loans, credit cards or home mortgages. The prenup agreement will specify that the debts will only be assigned to the person who made them so the couple doesn’t share the liability of paying them off.
How Much Does a Prenup Cost?
The creation of a prenuptial agreement can range in costs based on how simple or complicated the financial details are between you and your spouse. The costs can range from $1,500 up to $5,000, as this may also include attorney fees. It is always ideal to have some type of agreement if you are worried about your inheritance going to certain family members, or when you are dealing with business ownership rights, so you don’t have to deal with long court proceedings after a divorce. You want to get professional help with your prenup to ensure that the agreement will protect your rights.
Disadvantages of Prenuptial Agreements
Prenuptial agreements are not for everyone. It can kill the romance between a couple before they ever walk down the aisle. Yet there are other disadvantages to signing a prenup agreement. A prenup can give up all your rights to your spouse’s estate after their death, especially if they want you to have certain assets yet fail to state the details in their will. Also, if one spouse is a housewife or househusband (or a low-wage earner) and is used to a certain lifestyle, they may not be able to have enough money to sustain a suitable lifestyle after the divorce if there are spousal support limits stated in the prenup.
Another downside to a prenuptial agreement is when both spouses have a financial interest in a business that only one spouse has ownership in. You may feel that you have contributed to the business up to the point where you have made it into a financial success. Unfortunately, you may not be able to get your fair share of the company’s increased value due to the prenup agreement.
What Happens If I Refuse to Sign a Prenup?
Nobody can force you to sign a prenuptial agreement. You could refuse to sign one for a number of reasons including the fact that the terms will not protect your financial rights, or because you feel uncomfortable or even offended that your soon-to-be-spouse wants one. You may end up marrying your significant other without the agreement, or they may make the prenup a condition to being married. It is always best to discuss your finances and your worries with the other person to decide on what is best for the both of you and your relationship together.
If you decide to obtain a prenuptial agreement, seek professional legal help from a family law attorney. Attorney Gabriel Cheong at Infinity Law Group handles the creation of prenuptial agreements for couples who are worried about what will happen to their assets and debts when there is a divorce. Contact his office today at (617) 273-5110 or fill out the convenient form to set up a free phone consultation.