To some couples, there are no two words that are more of a buzzkill than prenuptial agreement, and you or your future spouse may feel that it shows a lack of faith in your relationship. The truth however, is that for every 1,000 marriages in the U.S. during a one-year period, 19 of them ended in divorce, according to the National Center for Family & Marriage Research. In spite of these kinds of statistics, it is natural to believe lasting love will get you through the hard times. While you may not want to think about it, entering into this contract with your future spouse may actually strengthen your marriage and provide you with support during those difficulties. Check out these five important reasons to create a prenuptial agreement.
1. Clear separation of individual debt
When you get married, you are entering into a legal contract with another person, and that ties your finances together. While you may be thinking about how your blended incomes and assets will affect your relationship, you should also consider the fact that your partner's debts may also become your responsibility. These could even follow you after a divorce, but a prenuptial agreement may be the key to keeping debts separate.
2. Protect your property
If you are building or have established your business before your marriage, you may want to maintain it as separate property and prevent it from becoming a marital asset. A prenuptial agreement can address this specifically by designating your business as a separate entity, along with other assets that you want to protect.
3. Lay out property division
During your marriage, you and your spouse will probably acquire some joint assets, such as a home or real estate, retirement accounts, vehicles and other items. Once you file for divorce, the division of these may become a source of conflict that drags out the process and drains your finances through a prolonged legal battle. By identifying these in a prenuptial agreement, you may be able to avoid or minimize some of the disputes that could arise during the heightened emotions of the separation.
4. Document agreements
Going into your relationship, you may have certain expectations of your new spouse that should be discussed to prevent a lack of communication that builds walls between you. To make these even clearer, you may want to put them in writing. Documenting them in the prenuptial agreement may be key to preventing hard feelings between you later in the relationship.
5. Keep the peace
When you and your future spouse have a clear guide for what you are getting into and what you can expect out of the marriage should it end, it creates a peace of mind rather than conflict by establishing level ground that both of you can stand on to reach a fair conclusion. This may help you weather the challenges you may face during the unexpected twists and turns of your relationship.
These are just a few reasons why you might consider a prenuptial agreement. Depending upon your unique circumstances, you may discover other strong benefits to developing this document. If you are already married, a postnuptial agreement may serve the same purpose for you and your spouse. As you reflect on your decision, consider discussing your options with a knowledgeable attorney to see what would best suit your situation.