Prenuptial Agreement Basics to Protect the Family

 

In years past, Prenuptial Agreement was regarded unfavorably by courts as a matter of public policy. It was presumed that a prenuptial agreement turned marriage, which was supposed to be an intimate and sacred bond between two people, into a financial contract. However, by the time the late 1960s and early 1970s rolled around, significant changes had taken place with regard to the beliefs and values of mainstream society. During this time, the courts started to apprehend that for all intents and purposes, a marriage is a kind of financial contract. The courts then began to look at prenuptial agreements more practically and realized that exploring a prenup is to a couple’s advantage, and as a result, they began enforcing them.

With approximately 1/3 of first-time marriages ending in divorce and 50% of subsequent marriages ending in the same fashion, it is becoming increasingly common for one or both parties to already children from a previous marriage. Therefore, a prenuptial agreement is an important way to protect the children who will inevitably become involved in the marriage.

The benefits of a Prenuptial Agreement extend beyond that of just making for a less complicated divorce. Another function of this agreement is to protect the post mortem wishes of the spouses should one or both of them pass away without having a validly executed will.

 

 

 

 

One issue that should be addressed in a Prenuptial Agreement is: who will inherit the couple’s money if both should die? Another important concern to consider and address in a prenuptial agreement is: how will the biological children of one party be affected if that person should die? In other words, if Bill has two kids and he marries Lorie, what will happen to Bill’s kids if he should die? Will Lorie continue to provide for them? Or, will they be left to fend for themselves? Of course, no parent wants the latter for his children.

A step-parent has no legal obligation to care for children after the death of the spouse. Therefore, a Prenuptial Agreement can ensure that the children of the biological parent are still cared for after the parent’s death. Issues such as inheritance and life insurance, and who the beneficiaries are of both, should be included within the prenuptial agreement. Therefore, a person with children who are getting married should consider a Prenuptial Agreement in order to secure a strong future for the children.


Children are not the only people who can be affected by a divorce. Other family members and business partners can be, as well. If Beth owns a family business, which has been passed down for generations in her family, she can protect the small business partnership agreement with a Prenuptial Agreement. Since a prenuptial agreement has to be fair to all parties, Beth will most likely need to “give” something in return in the Prenuptial Agreement. The peace of mind knowing that the family business will remain in tact, and stay within the family, is well worth the trade-off.

The Uniform Premarital Agreement Act was approved by the National Conference of Commissioners on Uniform State Laws in an effort to simplify prenuptial agreement laws throughout the United States. Most states have adopted some version of this act, giving them some of the most comprehensible rules for executing and appropriately following a valid agreement.

In a similar fashion, partnership agreement can be protected with a prenuptial agreement. If Tom and Scott have worked over the past five years to create a successful business, and Tom is about to get married, the business and its assets can be protected by the PRENUPTIAL AGREEMENT. This not only protects Tom, but it protects Scott, as well. Without a prenuptial agreement, Tom and Scott’s business could potentially be torn apart by a divorce.

As previously discussed, the function of a Prenuptial Agreement extends beyond that of just protecting a party with a disproportionately large amount of assets who is entering into a marriage. If a party does not possess either a prenup or a validly executed will, then the court will be the one to decide what assets go to the deceased party’s surviving spouse no matter what that party’s true intentions were. Furthermore, it just makes good sense for a couple to understand their financial rights and responsibilities before they enter into a marriage.

If you are seeking to execute a Prenuptial Agreement, then you should seek out legal counsel for every step of the process because there are just too many legal considerations to take care of without the help of a professional. In addition to the federal laws governing issues that logically fit the purposes of a prenup, there are both procedural and substantive issues that exist with regard to the agreement’s creation.

 

 

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