It may not be the most romantic subject to discuss during your engagement, but a prenuptial agreement can be a helpful financial planning tool for your marriage and help reduce time, conflict, and cost if you ever divorce. These contracts may be helpful for most couples but especially in these circumstances.
Compared to decades ago, couples are entering marriage when they are older. A person getting married for the first time in their 30’s usually amassed modest assets such as equity in their home or a retirement plan.
A prenuptial agreement allows a spouse to keep more of their pre-marital assets. After both parties disclose all of their assets and debts, they can agree on the allocation of this property. Otherwise, this decision will be rendered by a judge under Michigan law.
Prenuptial agreements are also important if either person has children from an earlier relationship. These agreements can contain your future spouse’s financial responsibilities to their children or former spouse or partner. These duties include child support, spousal support and payment of college tuition and other educational costs.
There are other issues that can complicate a divorce or a couple’s financial situation that justify a prenuptial agreement. These include significant income differences between you and your future spouse, entering the marriage with debt, owning or being a partner in a business or anticipating a large inheritance.
Considering a prenuptial agreement requires open and candid discussions. Because spouses must disclose their assets and debts, negotiations can also serve as a financial planning mechanism.
Each party should have their own attorney represent them and help them discuss and draft these agreements to assure that their rights are protected, and agreements are not entered under duress. The prenup should be concluded well before the wedding.
A prenuptial agreement allows couples to address their situation instead of having a decree imposed upon them. Attorneys can help provide options and assure your rights are protected when drafting these agreements and if there is ever a divorce.