Many people think signing a prenuptial agreement is the same as planning for your marriage to fail. While a prenuptial agreement does involve planning, it is not planning for your marriage to fail. It just helps you and your soon-to-be spouse plan what happens if that does occur.
A prenuptial agreement also allows partners to have a frank discussion about finances before they marry. It ensures you both are on the same wavelength about how to handle finances going forward. You also gain a firm understanding of your future partner’s financial picture. It eliminates that—surprise, I have a lot of credit card debt—conversation from your future.
Here are a few other reasons you may want a prenuptial agreement. If one or both of you:
- Has a large amount of debt
- Owns a business
- Owns other property
- Makes a lot more money
- Has children from a prior relationship
- Was married before
- Wants to include other people in estate plans
What can and cannot be included
A prenuptial agreement allows a lot of freedom. You can include arrangements about property, alimony payments, asset distribution, estate plans and life insurance policies. However, you cannot include child support payments or child custody in. Child support payments go toward the children, and custody is determined by what is in the best interests of the children.
To be legally valid, the prenuptial agreement must be in writing. The agreement must also be created and signed when a couple is planning to marry.
Some actions invalidate an agreement
Typically, prenuptial agreements stand up in the court of law. However, certain things can invalidate an agreement.
An agreement is not enforceable, if one of the partners did not:
- Disclose all their financial information
- Waive their right to this information being disclosed
- Sign the agreement willingly
If the court finds other stipulations in the prenuptial grossly unfair to one party, it may also declare an agreement invalid.
Though signing a prenuptial agreement may not be particularly romantic, it allows you to plan ahead and prevent future problems.