Do You Need A Prenuptial Agreement?
Keeping one's financial interests safe is always a good idea, and a prenuptial or premarital agreement is a great way to achieve this protection. If you plan to get married but you're not sure if you're a suitable candidate for a prenup, or if you just think it's an over-the-top solution, rest assured these agreements are not just for the rich and famous; they're for the everyday Jane and Joe like you. If you meet any of the following criteria, you should consider speaking with a family law attorney about getting a prenuptial agreement.
Are you wealthy?
If you make a lot of money and you wish to prevent your spouse from having access to that money should you divorce, a prenuptial agreement is probably a good idea. Without this agreement, your spouse would be entitled to receive half of anything that was accumulated during the marriage.
Keep in mind that there are a few states that do not allow prenuptial agreements that force the other party to give up their rights to receive alimony. However, this doesn't mean that they will automatically get half of your earnings. It only means that you may have to provide them with some spousal support.
If you and your partner's earnings are about equal, a prenuptial agreement may not be necessary unless you meet some of the conditions that follow.
Do you make significantly less than your future spouse?
On the flip side of the wealthy coin is the person who makes significantly less than their spouse. If you fall into this category, a prenuptial agreement can ensure that you would be taken care of financially after a divorce. Most people seek this kind of protection because they don't want blanket state laws to determine what they get.
You and your partner may verbally agree on how to handle a situation like this if you were to go your separate ways. But remember that during a divorce, emotions can run high, resulting in spouses that change their mind about something they may have agreed to before the marriage.
Does your partner plan to take out a loan?
If your partner acquired debt before you married, you'll be glad to know that you are not liable should they default on the payments. However, if they plan on taking out loans after you exchange your vows—which most people do at some point, even if it's in the form of a credit card—you'll definitely want to explore the option of a premarital agreement, particularly if you live in a community property state. In these states (Louisiana, Texas, New Mexico, Arizona, California, Nevada, Washington, Wisconsin, or Idaho), you could be responsible for debts accrued during marriage, but a prenuptial agreement can protect you from this liability.
If you live in a common law state, you generally won't be responsible for your spouse's debts acquired during marriage, unless the loans were specifically for the good of the household like food, clothes, child care, or education expenses.
Student loans can be a little tricky. If your partner has debt from past student loans, you may be responsible for helping pay those back should your spouse default. But it depends on what state you live in and whether or not the loans were Federal or private. With an attorney's help, you can consult the terms of the loan and decide from there if a premarital agreement is in order.
Do you own a business?
Like your money, a share of your business could fall into the lap of your spouse if you part ways. If you wish to prevent the possibility of having to "partner up" with your ex, a premarital agreement can offer protection in this department.
Will you quit your job after marrying?
In some cases, a spouse may plan to quit their job after getting married. This is usually to take over child rearing or caring for the home. Obviously, this will impact your current income, but it can also affect your earning potential down the road should you find yourself single again. Because you are sacrificing years of earning money as well as continual job experience, you will probably depend heavily on some sort of support if you and your spouse go your separate ways. A prenuptial agreement can lay out the details of how you will be protected in this situation.
For more information, talk to a lawyer at a law firm like Ivy Law Group PLLC.