In today’s world, prenuptial agreements (prenups) are no longer just for the wealthy. They have become a practical tool for many couples to ensure financial clarity and protection during the marriage and if divorce should occur.
Even so, many of the most common reasons to create a prenup have shifted over the decades. Now, they often focus on more in-depth issues than the standard alimony provisions of prenups in prior decades. Here are two 21st-century reasons why so many couples sign a prenuptial agreement.
Children from a previous relationship
Blended families are commonplace in the world today. For those entering a marriage with kids from a previous relationship, a prenup can safeguard their financial future.
You can use it to specify how assets will be distributed to ensure that children from previous relationships receive their share. Prenups can specifically allocate certain properties or assets for existing dependents, ensuring these are not treated as marital property in a divorce.
A jointly-held business
For modern entrepreneurial couples, a jointly-held enterprise can be a source of joy and a potential point of contention. A prenup can provide a framework for how your joint business will be managed, valued and divided upon divorce.
Examples of what you can address include ownership percentages, decision-making authority and the process for buying out a spouse’s share. Addressing these issues in a prenup helps protect the business’s continuity while safeguarding both parties’ interests.
If you are considering a premarital agreement or getting a divorce with one, seek a legal opinion from someone who can explain its benefits and potential risks.