Prenuptial Agreements

Statistics show that a third of all first marriages, and an astounding 50 percent of second or third marriages, end in divorce. With the divorce rate being so high, it is wise to consider the repercussions of divorce on your long-term financial future. If you divorce, your spouse may receive a percentage of your personal property and income determined by the court, unless you have a prenuptial agreement.

Prenuptial Benefits

A prenuptial agreement can help you in several ways:

• Define marital property and protect your separate property
• Support your estate plan
• Clarify special agreements
• Establish procedures and ground rules for deciding future matters
• Reduce conflict and save money if you divorce

Who Should Consider a Prenuptial Agreement?

If any of these describe you, you should consider a prenuptial agreement:

• You own assets such as a home, stock, or retirement fund
• You own all or part of a business
• You may be receiving an inheritance
• You have children and/or grandchildren from a previous marriage
• One of you is much wealthier than the other
• One of you will be supporting the other through college
• You have loved ones who need care, such as elderly parents
• You have or are pursuing a degree or license in a potentially lucrative profession such as medicine, law, or finance
• You foresee a large increase in income because your business is growing

Discuss it with your potential spouse first if you are considering a prenuptial agreement. Although these agreements generally have a negative stigma, you should think of it as a way to plan your long-term financial situation together. Communicating about financial matters in advance can actually build trust and strengthen your relationship.

After both of you agree on what you want the contract to say, you should draw up a list of your assets. In addition to assets such as businesses, real estate, and investments, remember that any licenses or degrees you obtain during the marriage are subject to equitable distribution if you get divorced.

Next, you should seek professional legal assistance to prepare the document. You and your potential spouse should retain separate attorneys to ensure that both parties' best interests are taken into consideration. At Mehlman TerBeek LLP, we can ensure that your property is protected and that every step of the prenuptial agreement process is carried out in a comfortable manner for both of you.