Financial Planning through Prenups prenup_law

Whether through tabloids, celebrity television shows, or common discussion, it seems like you learn about a new celebrity breakup, and inevitably, “prenups” are mentioned. What is a prenuptial contract or agreement? A prenuptial contract is a binding contract executed by soon-to-be spouses to define their obligations during marriage and in the event of legal separation, divorce or death. Although spouses have great freedom in the terms of their prenuptial contracts, prenuptial laws are very nuanced and unique to every state.

One of the main reasons why prenuptial contracts are on the rise is that they offer a great tool for financial planning. For instance,prenup attorneys can draft contracts to the unique intentions of the parties, thus allowing for the utmost flexibility in financial planning.

While a case could be made for just about any couple to have a prenuptial contract in place, it is well advised for couples with at least one of the two having substantial assets, or if one or both may inherit substantial assets, or if they have children from previous marriages. Small business owners are another class of people for which a prenuptial contract may make sense. Another scenario that may call for a prenup is where one spouse may be supporting another through professional school so that the supporting spouse will share equitably in the future income.

Why is a prenuptial contract important? Combining your assets with your spouse's after marriage could mean losing them in a divorce. It may make sense to keep your assets in your name and designate them as your property in the prenuptial contract. Prenuptial laws allows

parties to designate which property will remain their separate property.

Sometimes people come to a marriage with prior debt. A properly-drafted prenuptial contract (through qualified prenup attorneys ), perhaps in conjunction with a trust, can help protect your assets from a spouse's creditors.

Oftentimes a second marriage may involve children from a previous marriage. Typically, in these cases, you will want to make sure your children are taken care of when you pass away. Prenuptial contracts, again possibly in conjunction with a trust, can insure your surviving spouse is taken care while also making sure your money ultimately goes to your children and not your spouse's children. A well-drafted prenuptial contract can also greatly reduce the time and expense of litigation in the event of divorce or a contested will.

A prenuptial contract is generally not a DYI project. At a minimum, a couple contemplating marriage should discuss the need for or the possible benefits of having a prenuptial agreement with a prenup attorneys (and, even a financial planner). If the couple decides to move forward with a prneup, prenuptial laws will be necessary to make sure it is properly drafted and executed. In fact, each person should generally be represented by separate prenup attorneys (and some states, like California, mandate separate attorneys).

In order for a prenuptial contract to stand up in court in the event of separation, divorce or death, the prenup must be deemed “fair and reasonable.” Additionally, each state has unique procedures which must be strictly followed (e.g., California mandates a seven-day holding period). Thus, presenting a prenuptial contracts to your spouse to sign on the morning of the ceremony probably won’t fly.

Remember, though, prenuptial contracts are not bulletproof. The circumstances of the parties may change, such as one spouse needing to move to another state for education. You should consult with a prenup attorneys to amend your prenup every few years to make sure it stays up to date.

If you are getting married soon, congratulations. Consider, with your financial planner, and a qualified prenup attorneys , whether a prenuptial contract might make sense for you.

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