Pre-marital Agreements
Unfortunately, not everyone’s marriage will survive the test of time. A pre-marital agreement can help protect assets in the event the marriage ends. A pre-marital agreement is a contract, entered into prior to marriage, in which the couple agrees how assets are divided, whether support will be paid to either party, and how debts will be managed in the event of divorce or death of either party. Having a pre-marital agreement can help to alleviate some of the conflicts and disagreements that may occur during a divorce.
Many couples find that having a pre-marital agreement gives them assurance that their financial well-being will be protected in the event that their marital relationship status changes.
Who should use a pre-marital agreement?
Premarital agreements are frequently used by newly engaged couples of varying economical statuses and ages. A pre-marital agreement is beneficial to any couple seeking protection of individual assets in the event the anticipated marriage ends in divorce or any couple seeking protection of inheritance rights in the event the anticipated marriage ends in death.
What can a pre-marital agreement protect?
Couples choose to enter premarital agreements for an array of reasons including; financial protections, protection of business property, protection of family heirlooms, and, for some couples, to protect the inheritance rights of children from previous relationships.
Financial protection
A premarital agreement can be used to protect the finances of each party by restricting or limiting what property each spouse is entitled to in the event of separation, divorce, or death. The limitation of property can include property owned both prior to the marriage as well as property obtained during the marriage. Many couples marry young without a lot of property but want to protect future earnings. A premarital agreement can protect future finances of both parties by limiting or eliminating each party’s right to spousal support or alimony from the other party.
Business protection
In the event of divorce, a spouse may be entitled to a portion of a business owned by the other spouse. A pre-marital agreement can be used to protect a spouse’s business from the other spouse.
Family heirlooms
Sentimental heirlooms that have been passed from generation to generation can be at risk if a party enters a marriage without pre-marital agreement that protects heirloom from being distributed as marital property.
Protecting inheritance rights
In many instances a party has been married prior to the contemplated marriage and may have children from a previous relationship. To ensure that children from a previous relationship inherit A premarital agreement can provide protection of inheritance rights of their children from a previous marriage that a Will alone cannot provide. and reduce the stress of grieving family members.
What cannot be included in a pre-marital agreement?
A premarital agreement cannot include any incentive to encourage a party to seek a divorce.
A couple cannot enter a contract that pre-determine rights related to children including child support or child custody.
Certain requirements must be met to create a valid premarital agreement. If you are considering a premarital agreement and would like more information contact Plekan Law, PLLC to schedule a consultation.