Who needs a prenup? While prenuptial agreements were traditionally associated with the wealthy and famous, prenups benefit everyday people too. For example, a prenup requires transparency about each side’s financial situation and obligations, thus promoting honesty going into the marriage. A prenup can also protect one spouse’s assets from the other spouse’s debts or creditors. All business owners should strongly consider prenup.
Here are some scenarios where a prenup may be particularly beneficial:
- Business owners: If you own a business, a prenup can protect your company from being divided in a divorce. A prenup can confirm that your business is your separate property (and not divisible in divorce) when it otherwise would be subject to division even if you started the business before the marriage. A prenup can also specify whether the other spouse will have any ownership or involvement in the business.
- High net worth individuals: Individuals with significant assets, such as real estate or investments, can use a prenup to ensure that their assets are protected and divided according to their wishes (if at all). A prenup can also answer the alimony question before marriage, saving both spouses money and anxiety during a divorce.
- Second marriages or children: If you have children from a previous relationship, a prenup can protect their inheritance and confirm that your assets are distributed pursuant to your wishes. A prenup (and estate plan) can prevents a bitter legal battle between your loved ones over your assets.
- Professionals with licenses or degrees: A prenup can protect the value of a professional's degree or license, such as a medical license or law degree, and ensure that their earning potential is not compromised in a divorce.
Ultimately, anyone who wants to go into a marriage with complete financial transparency while also protecting their assets (from divorce or your spouse’s creditors) can benefit from a prenup. A well-drafted prenup can save both spouses tens of thousands of dollars in potential attorney’s fees during a divorce, too. It is essential to consult with a qualified attorney to determine whether a prenup is right for you and to ensure that it is legally sound.