No one wants to think about divorce when “love is in the air.” However, with nearly one in two marriages ending in divorce in the U.S., there is every reason to think about divorce and how it can impact your life. This is where a prenuptial agreement, simply known as a “prenup,” comes in.
A prenuptial agreement is a binding contract that a couple enters into before tying the knot. The purpose of this contract is to set the rules and guidelines on how you will handle assets and debts should the marriage end in a divorce. To create a valid prenup, both parties must be as transparent as possible about their assets and liabilities.
Here are two important items you need to include in the prenup agreement.
Each person’s assets and debts
A prenup is an excellent tool for you and your spouse to maintain separate control over any assets and liabilities you acquired before getting married. For instance, if you own a business and do not want to risk losing control of it should the marriage come to an end, you can classify your business as a separate asset in the prenuptial agreement. Likewise, if your partner is coming into the marriage with significant debt, you can use the prenup agreement to shield you from sharing this liability during the divorce.
Provisions for dependent children
Whether you have children from a previous relationship or with your current partner, you can use a prenuptial agreement to spell out the children’s property rights should the marriage end in a divorce or separation. However, it is important to note that you cannot include child custody, support or visitation terms in the prenuptial agreement.
A prenuptial agreement offers many benefits to a couple. However, it is important to understand what you can and cannot include before creating one.