While asking for a prenuptial agreement once may have raised a relationship red flag, savvy couples know that this type of legal document can actually help you meet your financial goals during marriage. Those who are already married and did not sign a prenup can opt for a postnuptial agreement.
Explore how a prenup or postnup can potentially benefit your marriage.
Enhance your communication skills
According to Forbes, money issues and poor communication are two of the most common reasons couples get divorced. Negotiating a prenuptial agreement can foster honest conversation with your partner by bringing these sometimes sticky issues to the forefront.
Provide for a nonworking spouse
When a couple decides that one partner will stay home to raise children while the other will serve as the breadwinner, the partner who does not work may have concerns about his or her earning power. In this situation, you can ensure that both of you can be self-supporting after a divorce by establishing provisions for spousal support, education funding and/or a retirement plan.
Save on business valuation
If you earn a business, obtaining a professional valuation of the company can be costly. Avoid this scenario in a divorce by designating the business as one partner’s separate property in a prenuptial or postnuptial agreement. Often, the partner who does not own the business will then receive a larger share of marital assets if the pair splits.
Bolster family trust
This type of agreement can smooth the relations between in-laws, especially when one family resides in a much higher tax bracket than the other family. For example, if your spouse’s parents lend you money for a house, a postnuptial agreement can detail the repayment of these funds. In addition, a postnuptial agreement can provide reassurance for a couple who potentially faces divorce. If they want to save their union by rebuilding trust, outlining fair division of assets can be a powerful way to do so.
When entering this type of agreement, make sure its terms comply with Tennessee law. Both parties must sign a prenuptial and postnuptial agreement in good faith.