When couples think of prenuptial agreements, they often think of the extremely wealthy or famous trying to protect their assets. What often gets overlooked with this frame of mind is that prenuptial agreements can protect all kinds of people, regardless of their income level.
What is a prenuptial agreement?
If you’re considering a prenuptial agreement (or “prenup” as they are often called), it’s important to understand exactly what it is. A prenuptial agreement can serve as legal protection for any assets you bring to a marriage. They can also protect your credit from your spouse’s debts in the event that your marriage dissolves. Depending on your state, prenuptial agreements can add an extra layer of protection to ensure that any assets contributed to the marriage (like a pension, property, or inheritance) are clearly identified and allocated to the spouse who contributed the asset in the event of a separation or divorce.
Do I need a prenup?
Prenuptial agreements may seem new, but there’s historical evidence that they’ve been around since ancient Egypt, and many royal families have had prenuptial agreements in place hundreds of years ago to prevent spouses from absconding with land or money. All this to say, if you’re considering a prenup, you’re far from the first person to do so.
In our modern age, people are marrying later than they used to. This means that you, as an individual, will have more time to accrue meaningful assets that you may want to be protected. People might enter marriages with real estate, inheritances from their parents, hefty saving accounts, and businesses that they wouldn’t want to lose in a divorce. While it might not be the most romantic discussion, it’s prudent to help both you and your spouse protect yourself and your financial future.
How to have the conversation?
While it might not be the most romantic discussion, Forte Family Lawyers suggest looking at a prenuptial agreement the same way you would insurance or a will. While you may not have any plans on car accidents, damage to your home, or your death, being prepared mitigates further pain if these things were to happen.
Position the discussion less as an assumption that your marriage will fail, and more as a protection to both of you. Ultimately, a prenup can be something that can ease both your minds. Also, explain to your future spouse that this is about protecting both of your individual assets.
What do I need for a prenup?
In Australia, prenuptial agreements are legally binding documents. However, there are a couple of criteria your prenup needs to be considered enforceable by a court of law.
The contract has to be correctly dated
It has to be signed by a witness
It has to be signed by all parties
The terms of the prenup have to be legal
Both parties have to have signed the document without undue influence or duress
Both parties have to have received independent legal advice
Each party must disclose all their assets and liabilities
And both parties have to attach a certificate of independent advice to the agreement
While it may be an initially difficult conversation to have, it’s also important to consider that marriage is all about being able to have difficult conversations.
So it’s best to learn now before you’re legally bound to your spouse (and don’t have a prenup to rely on!)
