Prenuptial agreements establish rules about asset ownership when a couple enters into a marriage in the event the union ends in divorce. While many people believe these legal documents are only suited to the extremely wealthy, they’re quite useful in a wide variety of situations. Forbes offers a few examples of people who should have prenups in place before they marry.
For people entering into a second marriage, prenups are actually useful as an estate planning tool. If a spouse dies while married, the surviving spouse is entitled to some percentage of the estate. This can be a real issue if you plan on leaving your adult children the majority of your assets, as you’re not permitted to disinherit your spouse. A prenup provides a waiver to these rights, so a couple can plan their estate as they see fit, which is crucial to ensure your final wishes are respected.
Business owners must also have prenups in place before entering into a marriage. This is true even if your business is just starting out, as there’s no telling what the future holds. If you don’t have a prenup and your enterprise ends up being profitable, you’ll be faced with a costly valuation dispute at the end of your marriage. If you develop a prenup before you get married, you’ll be able to make these decisions in good faith so both you and your spouse know what to expect in the event of a divorce.
Prenups also make sense for couples who move after getting married. Laws vary from state to state in terms of property division, with some being more favorable than others. With a prenup in place, you won’t have to worry about being subject to asset division laws that are not in your best interest. While the topic can be difficult to broach, it’s in the best of interest of both parties to hash out financial differences before getting married.