There are a number of misconceptions associated with prenuptial agreements. However, these agreements can help ensure an equitable outcome if a marriage fails. Even a lower income couple could benefit from setting up a prenup.
The reality is that prenuptial agreements are designed to ensure that people are able to hold onto assets that they bring into a marriage. Many people are now holding off on getting married until later in life. This means that the property spouses bring into a marriage is often much greater than it was in previous generations. With a prenuptial agreement, people are able to keep assets that they brought with them if a marriage ends.
Despite what some may believe, prenuptial agreements aren’t created on the basis that people expect their marriage will end in divorce. The reality is that about half of marriages fail, so it’s just pragmatic to hope for the best and prepare for the worst. Further, if one person stays home and cares for the kids instead of developing a career, they are likely to be setting themselves back financially. A prenuptial agreement can protect individuals who make these choices.
If a separating couple does not draw up a prenup, issues related to their divorce will need to be determined through mediation or litigation. With mediation, a couple works together to come to agreements over how issues like asset division and child custody will be decided. In the case of a litigated divorce, a judge will make these determinations based. A lawyer could explain the differences between mediated and litigated divorces.