You make a lot of money. People with a high net worth should consider a prenup simply because it will protect their assets and financial status in the event that the marriage doesn’t last. A prenup can stipulate how property such as stocks, bank accounts and even interests in business ventures will be distributed. Plus, you can also address the issue of spousal support, with some stipulations. Learn more by reading “Criteria For Valid Prenups” .
Your future spouse makes a lot of money. Because states have different laws for determining what is marital property and what is considered to be separateamong the parties, there’s no way to guarantee that you’ll receive adequate compensation in the event that the marriage fails. Most courts do consider alimony for the lesser-earning spouse when the other makes considerably more, however, this is not guaranteed. A prenup could help you establish an adequate support plan to help you live on your own after a divorce.
You own a business. While you may have started the business prior to your marriage, any income received after the wedding would likely be considered community property and its also reasonable to assume that your spouse may contribute to the business and its success over the years. A prenup would help ensure that you keep controlling interest in your business in the event that the marriage doesn’t last.
You have childrenfrom a former marriage. These days, blended families are quite common and it’s not unusual for one or both spouses to enter a second or third marriage with a substantial amount of “inheritables” as well as heirs to inherit them. If this sounds like you, a prenup could stipulate who gets what when you die, meaning those precious family heirlooms and financial assets would go to your kids in the event of death or divorce.
You plan to put your future spouse through college (or vice versa). It’s not uncommon for couples to agree to put each other through college or a trade school during the early years of their marriage. But what happens when you’ve held up your end of the bargain and then the marriage fails before you get your chance to finish school? A prenup can help ensure that your ex follows through and either pays for your schooling or reimburses you for your contribution to their education.
You have a professional license or degree. In many states, this type of professional designation is considered to be an income-producing asset. That means your ex could receive a percentage of the future income this designation produces. A prenup gives you the opportunity to exclude your licenses and degrees (as well as their monetary value) from the property distribution process.
You have separate property that will be commingled with community property. One of the first things many couples do after marrying is purchase their first home. While the house itself will be considered marital property, the initial down payment for the house often comes from one of the spouses, out of an inheritance or “separate” savings account, for example. By committing this separate property to a community purchase, you are effectively “commingling” your funds and should you divorce later, your separate interest may not be protected. A prenup allows you to stipulate this separate property so that you are reimbursed during the property distribution process during a divorce proceeding.
Your future spouse has a substantial amount of debt. If your future spouse brings a load of debt to the marriage, a prenup could possibly protect you from assuming some of that debt down the road. Typically, you’re not legally responsible for debt assumed by your spouse prior to the marriage however, if the marriage lasts for a great length of time, it may be difficult to prove that the debt was separate and not shared. You can list these debts in a prenup and even include balances so that your obligations would be limited.
You have a substantial retirement fund, profit-sharing plan or IRA.Retirement plansand the like are sometimes considered to be a future income in the property division process. That means that your hefty 401(k) could become part of the marital assets during a divorce. To keep these types of investments separate, you need to document your interests in a prenup.
It doesn’t cost as much as you think. While attorneys can charge some pretty high hourly rates to draft your prenup, there are plenty of do-it-yourself forms that allow you to craft your own document. Just be sure you’ve considered all of your financial concerns when creating your prenup and if you aren’t sure about something, get the answers before you sign.
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