Some couples struggle with deciding whether to sign a premarital agreement. Young couples who are marrying for the first time sometimes don’t want to admit that divorce is a real possibility. The reality is that nearly half of all marriages end in divorce, and some couples who avoided signing a prenuptial agreement later wish they had.
Even if a couple does not have a lot of money or assets, a premarital agreement can still be a good idea. For one thing, such an agreement can detail the treatment of future earnings. And there is more than just assets to consider, including parental trusts or successions related to family businesses.
In general, it’s a good idea for couples to know as much as possible about each other’s financial situation well before the wedding. That way, they can think about details an agreement can include, and it also gives them time to contact experienced professionals to set up the terms of the agreement.
Signing such an agreement can be beneficial down the road, particularly if a divorce isn’t particularly amicable or collaborative. For example, if a soon-to-be ex-spouse tries to hide assets, a premarital agreement can reveal possible fraud because all assets must be disclosed at the time the agreement is formulated.
These agreements can also speed up the divorce process since less negotiation is necessary.
For engaged couples negotiating premarital agreements, it’s important that they communicate effectively to ensure each person’s expectations are lined up and the terms are fair.
Source: Fox Business, “Decision Points: Should you sign a prenuptial agreement?” July 12, 2012