Studies have shown that February represents the busiest month of the year for divorce in many states. While divorce can have a significant effect on someone’s life and finances, a prenuptial agreement could significantly limit any negative impact. Prenups can both reduce the risk of a surprising outcome from a divorce and protect a spouse’s finances.
Prenuptial agreements are contracts that are entered into by a couple before they marry. These documents outline what both parties are obligated to do in the event of a divorce, separation or annulment. While such agreements will vary from couple to couple, they normally include how assets will be split, which assets are owned by which individual and what property is considered joint property.
Since about half of all marriages end in divorce, there are a number of reasons why a couple might want to set up a prenuptial agreement. For example, couples may want to consider a prenup if one spouse has significantly more assets than the other, one individual has a large amount of debt or if either owns a business.
Even with a prenuptial agreement, there are still many issues that may need to be considered if a couple chooses to end their marriage. If the marriage resulted in children, people will have to come to an agreement about child support and custody. Additionally, if the requirements of the prenup are not met, the agreement may become invalid. A lawyer could help a client understand what prenups can do and help them draft or review one.