What is typically covered in prenuptial agreements?
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Pre-marital agreements are binding contracts between you and your fiance. A premarital agreement, or pre-nuptial agreement, can aid in communicating specific needs, protecting assets, or ensuring that children receive estate or property inheritance intended for them, among other agreed upon terms. Such pre-marital contracts typically include a number of various topics.
Assets and Taxes in Pre-Marital Agreements
Assets are a primary concern in a premarital agreement. The property and prospects each spouse is bringing into the marriage are included in the pre-nuptial agreement. This will ensure that anything enumerated as your property going into a marriage will be your complete property coming out. Otherwise, most states will split everything in half. This area of the premarital contract should also detail who will own the investment earnings from such property, what will happen with the earnings of each spouse, and what happens in regard to property one spouse may inherit.
A pre-nuptial contract should also state where a couple will be living and how taxes will be handled (e.g. joint or separate returns). Taxes and residences must be decided before you file your first tax return as a married couple. Otherwise, you could wind up with a very embarrassing audit.
Pre-Marital Agreements and Family
For couples with marital histories, prior family circumstances should be included in the premarital agreement. Mixed families are becoming more and more common and as a result, it's important that each spouse enter the agreement with a clear idea of any previous children and spouses. Be sure to mention any outstanding child support and alimony, this is to maintain integrity in your marriage. A pre-marital agreement should also concern what happens in the event of a spouse's death. The fact is that most couples put off writing their wills. But if you are already going to the trouble of writing a premarital agreement, it's a good idea to include inheritance details should something unexpected happen. Where one or the other party is marrying for a second or third time, certain assets may be left to a child from a previous marriage rather than to the new spouse.
Expectations with regard to child rearing and marital duties should be a part of any pre-nuptial agreement. Lack of communication can cause problems in a marriage. Consider ironing out certain details in advance by mentioning them in the agreement. Some examples of pre-marital agreements involving child rearing and marital duties include: number of children, caregiver for the children, and how often the working spouse may travel alone for work.
Planning for a Divorce in a Pre-Nuptial Agreement
Another important element of a premarital agreement is post-divorce support, what will happen to debts owed before the marriage and those thereafter incurred. While most engaged couples don’t like to think about the possibility of divorce, the fact that 50% of marriages end in divorce cannot be ignored. By defining these terms before your marriage in your pre-nuptial agreement, you could make a potential divorce much faster and less expensive.
Getting Legal Help
These are the typical topics that you'll find in a pre-nuptial contract, but what goes in a pre-marital agreement will depend on your specific situation. If you are planning to draft a pre-nuptial, it's in your best interest to contact an attorney.