You shouldn’t have to risk your financial independence or well-being just because you fell in love. You also shouldn’t have to part ways with a business you worked so hard to launch from the ground up on your own, or carry your spouse’s debt after they made poor financial decisions before they met you.
A prenuptial agreement, or prenup, is a legal document that helps protect assets, debts, businesses, and anything else related to money. If you’re getting married and unsure whether a prenup is something you need to worry about, here’s why it could make sense for you:
Protect Your Pre-Marital Assets and Savings
While you’re willing to share everything with your spouse and spend the rest of your life with them, that doesn’t mean you want to lose the assets and savings you had before you got married if your marriage ends in divorce.
A prenuptial agreement can protect your personal bank accounts, property, retirement funds, and other assets you want to keep as your own if you end up parting ways. Meghan Freed, a prominent Connecticut attorney, advises engaged couples to begin the prenuptial process earlier than they may initially think is necessary because it can take time to determine what each of you own and what you want to protect. Now is a great time to sit down with your spouse and discuss the contents of your prenup.
Classify Your Business As Separate Property
Whether you have a share in a family business or built your own business from a hobby into something you’re extremely proud of, you deserve to keep it as your own. Laws vary on spousal rights, but spouses are often entitled to a share if the business started during the marriage. If you started it before the marriage, its growth or appreciation may be considered marital property. However, a prenup enables you to classify your business as separate property. It can also include a clause to waive claims to appreciation.
Protect Inheritances and Family Wealth
There are so many reasons why you may want to protect your inheritance and family wealth. Even if you love your spouse with all your heart, you may realize the importance of ensuring family heirlooms and funds stay within your bloodline.
Including family wealth and inheritances, both existing and future, in a prenup helps prevent commingling, which occurs when an inheritance starts as separate property but becomes marital property if you mix it with household finances, keep it in a joint bank account, or use it to buy a joint asset.
Family businesses can also rely on prenups for stability, as they help keep shares and value within the family line. Then there are heirlooms and assets meant to be passed down. If you have children from a prior relationship, a prenup can often be how you ensure assets go to them instead of being reallocated to a spouse in a divorce.
A prenuptial agreement can often bring financial freedom and peace of mind to a relationship. If you want to protect your premarital assets and savings, now is the right time to discuss your needs with your spouse and speak with a trusted lawyer about taking the next step. Your future fiscal stability may just thank you for it.
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