UNDERSTANDING A PRENUP AGREEMENT
Marriage is one of the most significant moments in one’s life. It is the beginning of a new chapter with another person. It is the start of a partnership. There are times when this eternal partnership comes to an end. It could be because of divorce or death. In either of the situations, it is always best to protect the assets that you have inherited and built over time. The best way to do this is by drawing up a Prenuptial agreement. A Prenup Lawyer will help you draft a fair agreement, that will protect your assets and debts. If you don’t know what a Prenup agreement entails, here is all that you should know.
What do you understand by a Prenup agreement?
A prenuptial agreement is drawn up to protect the asset and debts of the partners in case of a divorce or death. In the agreement, you can identify various assets like properties, pensions and investment accounts. The identified assets in the agreement will not be included when there is a division of property taking place in case of a divorce. With the help of a prenup, you protect the assets and their growth. It also enables you to protect family inheritances. When drawing up a prenuptial agreement, it must be fair to both parties. The prenup will help both parties to know what to expect during the division of assets during divorce.
What happens when you don’t have a Prenup?
In case, you don’t have a prenup, the property owned by the both of you will be divided as per the law. There is a belief that the property would be divided equally. That’s not what always happens. The equal division is not how the division of property works, and it can also be really unfair. You must have a prenup agreement in place to prevent this.
What should you include in a prenup agreement?
The ground rule that you should keep in mind while drawing a prenup is that the agreement shouldn’t be confusing. It should be fair and reasonable to both parties. Some of the things that you should include in a reasonable prenup are as follows:
- Assets: The agreement should include the assets you own and don’t wish to divide in case of divorce. They could include home, investment account, bank account, pension, stocks, stock options, cryptocurrency, RRPs and businesses interests.
- Debts: A Prenup also protects your debts. It prevents debt equalization in case of divorce. If you wish, you can also put a provision stating that if one partner pays off another partner’s debt, the amount would be credited.
- Children from previous relationships: If you or your partner have children from a previous relationship, you can protect their rights if something happens. The prenup will enable you to leave separate property to the child.
- Spousal Support: The prenup could also address whether spousal support would be paid or not. If it is, then how much.