A prenuptial agreement (also referred to as a premarital agreement) is defined as, “an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.”
A prenuptial agreement can protect you down the line if you and your new spouse part ways in the future. Failing to make a prenuptial agreement will result in the courts having power over your estate.
Who Should Have a Prenup?
Prenuptial agreements may not be for everyone. If one of the following situations applies to you, you may be a good candidate for a prenuptial agreement:
- When one spouse is substantially wealthier than the other
- One of you owns a business
- One of you is about to fall in to a lucrative career- medicine etc.
- You have the potential to earn a large amount in the future (stocks or inheritance)
- If you have previous children or elderly grandparents that must be taken care of
How Long Do These Agreements Last?
Generally speaking, prenuptial agreements are permanent, but feelings do change, and you may reach a point in your marriage where you no longer feel a prenuptial agreement is necessary. If you or your spouse decide that you no longer wish to have a prenuptial agreement, a signed document with you and your spouse’s written agreement will revoke the terms of the prenup. You can also add a “sunset clause” to your prenuptial agreement that sets a specified time in which the document expires.
If you are already married and wish you had considered filing a prenuptial agreement, a postnuptial agreement can offer you the same sense of financial security.