Although a prenup may be a difficult subject to address, it is an important aspect of marriage that should be considered before tying the knot. Research has shown that nearly half of all marriages will end in divorce and one of the leading causes is finances. In order for marriages to last, couples need to be on the same page with handling their finances and a prenuptial agreement can help.
- You have children from a prior relationship
Prenups are not only used in the event of a divorce but also in the event of a spouse’s passing. A prenup can protect the inheritance of your children by detailing how you want to have your estate distributed.
- You own your own business
If you own your own business (whether from before meeting your soon to be spouse or while you began dating) or you will be inheriting some or all of a family business, a prenup can help protect the business from your spouse if they attempted to make a claim for ownership during divorce proceedings. A prenup can also set guidelines for the income that stems from the business, especially if it is the main source of income for your family.
- If only one of you will be working
Being a stay at home parent is a full time job without pay or benefits, so a prenuptial agreement can establish how much support and for how long the income earning spouse is responsible for in the event of a divorce.
- Previous Debt or Savings
Whether its school loans or a shopping addiction, one spouse may enter the marriage with a significant more amount of debt than the other. A prenuptial agreement can help protect the other spouse from having to continue to pay off a debt that they didn’t rack up themselves. On the reverse side, one spouse may have a significant amount in savings stashed away that they set aside prior to meeting their spouse. A prenup could help protect those funds during divorce proceedings.
5.You will be receiving a large inheritance
If you know you will be receiving a large inheritance, including it in a prenuptial agreement can help protect it should you ever use the funds on community property during your marriage, like the purchase of a house.
Source: How common is divorce and what are the reasons? accessed Dec 03, 2016
Cheat Sheet, “Marriage: 5 Signs You Need a Prenuptial Agreement,” Megan Elliott, accessed Dec. 02, 2016