Everything You Need to Know about a Prenuptial Agreement

Everything You Need to Know about a Prenuptial Agreement

Everything You Need to Know about a Prenuptial Agreement

It is not surprising that many soon-to-be-married couples may consider exploring the possibility of a prenuptial agreement to be a risk for their relationship.

What is a prenup?

A prenup, or prenuptial agreement, is a contract in which an engaged couple claims their responsibilities and rights regarding marital and premarital assets and debts and what will happen if their marriage ends in death or divorce. Discussing a prenuptial agreement requires partners to address accrued debts,  saving and spending habits, and financial goals. It is important to note that because one of the leading causes of divorces is money issues, having these conversations before marriage may assist in building a foundation for a long-lasting and strong marriage. Experts agree that a prenuptial agreement can act as a wise marital investment because it helps outline the couple's finances and can help avoid a contentious and costly divorce when a marriage is dissolved. Our experts on premarital agreements in Orlando offer this guide to help answer your questions about prenuptial agreements.

How much do prenups cost?

They can range anywhere from $1,500 to $10,000 or more if you have an incredibly complicated estate, and a flat fee is often required for a simple agreement. Attorneys usually charge their regular hourly rate for more complicated prenuptial issues. The process may seem unnecessary, expensive, and annoying, but a well-drafted prenuptial agreement can be incredibly beneficial in the case of a divorce.

Who needs a prenup?

Prenuptial agreements may be extremely justifiable in the following circumstances. One or both parties was previously married- Individuals who were once married and suffered a bitter and extended divorce may not be willing to get married again without ensuring a secure financial future. This is particularly true in cases where a person thinks their ex-partner got a better deal in their divorce or took advantage of them.

There are children involved- In many situations, individuals choose to protect their children's financial interests. A prenup can help ensure that premarital assets remain separated and allow the individual to create a will or living trust to provide for their offspring in case of their death. In addition, premarital agreements can often prevent battles over wills once a parent dies.

One party is wealthy- Prenups are often requested when one party is more affluent. A person who marries into money may see their lifestyle significantly improve, which without a prenuptial agreement can create certain rights for property division and spousal support in the case of a divorce. On the other hand, many people believe a prenup ensures that a person is not marrying you for your money.

One party has a lot of debt- Premarital debts are generally required to be paid by whoever incurred them. However, marital debts can often be separated between spouses, causing a disadvantage for the non-debtor. If an individual has a habit of spending money and the person they are marrying does not want to be responsible for the debt they incur during their marriage, a prenup can help protect them. A prenuptial agreement can require that one spouse's premarital debts are not paid from any joint community property during the marriage. Creditors can often find ways to collect premarital debts from common assets if a prenup is not in place.

One or both parties own a business- If you own a company before marriage, a prenup can be sensible because divorce often destroys family businesses. In addition, if your business is owned with other people, your divorce may impact their share of the company. A prenuptial agreement allows the party to have complete control over managing their business now and in the future. If one spouse has built a business before the marriage, they may choose to limit their partner from having any interest in the company during their marriage.

These are just a handful of the reasons people draft premarital agreements in Orlando. Contact us today to learn more about the options available to you.

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