Prenuptial Agreements: What They Are And Who Needs One
Prenuptial agreements might have a bad reputation from tabloid accounts of celebrity divorces, but these important legal arrangements are for more than the rich and famous. Nor are prenuptial agreements a statement that a couple plans to divorce or otherwise wants an exit strategy. When done right, a prenuptial agreement can help a couple take stock of their assets and set the stage for efficient and open communication about joint finances, thus strengthening the marriage. In essence, a prenuptial agreement enumerates one or both of the partners’ assets and stipulates which of these assets will not become jointly held upon marriage but instead remain individual property. While one of the most common reasons, and the most notorious in pop culture, is to protect an individual’s assets in case of divorce. This is especially important when a couple’s assets are imbalanced; if one partner makes or owns ten times the other’s worth, the assumption of each partner being entitled to half the property at divorce is not fair. Prenuptial agreements, however, have many other uses and can serve the needs of many kinds of people. For instance, a prenuptial agreement can protect one spouse’s assets from the other’s liability. For example, if a woman is a doctor, and her husband owns his own business, they may have a prenuptial agreement as part of an asset protection plan. If the wife is sued for malpractice, her husband’s business is not counted as part of her property, limiting her potential payout amount and
