Prenuptial Agreements: Benefits and Reasons to Use
Talking about a prenuptial agreement is probably the most unromantic conversation a couple could have. But, it is a highly important conversation that benefits both parties in terms of securing their assets.
A prenuptial agreement is a legal contract signed by future spouses. Popularly known as a prenup, the contract outlines possible asset-dividing scenarios in the case of a divorce. Prenups are a great way of securing one’s financial or other assets. Prenups are becoming more common and according to an online survey conducted by The Harris Poll, couples are increasingly inclined to sign a prenup before entering a marriage.
Stay with us as we elaborate on the basics and details of prenuptial agreements and why you should consider one. We’ll also discuss the benefits that come with signing a prenup, as well as pinpoint the categories of individuals who’ll benefit most from a signed prenuptial agreement.
Who Can Benefit the Most from a Prenuptial Agreement?
In Washington, engaged couples can enter into a contract regarding property matters under the Washington Revised Code, Section 26.16.120. Long gone are the days when prenuptial agreements were only for the rich and famous. Granted, premarital agreements are mainly used to protect a spouse’s wealth, but more and more couples are considering prenups for additional reasons.
Among the reasons people are considering prenuptial agreements are the following:
- Couples looking to distinguish properties to pass onto children from previous marriages: Couples who want to differentiate properties to pass on to their children from previous marriages could use a prenuptial agreement. The prenup will allow a couple with children from past marriages to outline the fate of property if one spouse dies.
- Couples looking to define financial privileges: When entering a marriage, it doesn’t matter if the couple has children from prior marriages or is well off or not, as they can utilize a prenup to delineate their financial rights. With a prenup, couples can confidently establish financial management throughout their marriage.
- Couples looking to simplify a potential divorce process: While it may appear counterintuitive, it is important to consider the topic of divorce when preparing for marriage. In such a situation, it is prudent to have a prenuptial agreement in place, as it can proactively divide assets or determine alimony and reduce the likelihood of disputes.
- Couples looking for protection from debt: It’s not unusual for either spouse to come into a marriage with debt. In that case, having a prenup signed helps protect both spouses from having to pay for the other person’s outstanding debt. Common examples include medical expenses and student loans.
Reasons to Sign a Prenuptial Agreement Before Marriage
Couples have myriad reasons for pursuing prenuptial agreements. Some seek to safeguard their finances, while others prioritize their children’s financial security. Regardless of the motivation, prenups now enjoy widespread popularity across the United States.
Let’s explore some of the most common reasons couples enter such agreements.
- Protection of wealth
- Existence of amassed premarital debt
- Securing children or other dependents
- Protection of businesses
- Protection of heirlooms
- Protection of pets
- Specification of lifestyles
More and more couples today are considering a prenup and for good reason. These agreements can add security to decisions like being a stay-at-home parent or protecting against certain behaviors from the other spouse.
For example, if one of the parties engages in drug addiction, gambling, or other hazardous behaviors, a prenup with a lifestyle-specific clause can provide monetary compensation. It is crucial to follow the laws and regulations of Washington state to avoid potential conflicts.
In the case of a stay-at-home parent, a prenuptial agreement ensures equal financial dispersion in the event of a divorce, even if that spouse hasn’t contributed to the marriage financially. Couples can manage this situation by, for instance, ensuring a constant money flow to the stay-at-home partner or assigning real estate to their name so they can have assets.
What Will the Prenuptial Agreement Cover?
When a prenuptial agreement is carefully outlined and negotiated, it can cover an abundance of interests and assets, such as:
- Physical and intellectual properties
- Retirement funds
- Education funds accumulated prior to the marriage
- Real estate owned by either spouse during marriage
- Property interests of children
- Spousal support in the case of a divorce
- Fostering religious beliefs and educational rights to children born in wedlock
- Amount of finances and monetary obligations of each spouse in the event of a divorce
- Waiving of debt
- Management of inheritance
- Ownership of insurance policies or disability policies
Lastly, it is important to remember that, should a judge believe any of the provisions in the prenuptial agreement is rather unfair and detrimental to either spouse, they can abolish the provisions, rendering them void. Such legal exemptions can vary from state to state, which is why legal consultation is highly recommended.
In Washington, a judge can invalidate or modify specific prenuptial agreement provisions if deemed unconscionable or unfair. This means that if a provision in the agreement is found to be extremely one-sided or disproportionately favors one spouse over the other, the court can strike down or modify that specific provision while still upholding the rest of the agreement.
To ensure that a prenuptial agreement in Washington complies with the state’s laws and to protect the interests of both parties, seeking legal advice from a qualified attorney that understands family law is highly suggested.
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