Prenuptial agreements (also called "prenups") have something of a bad rap, but they can be a useful tool for ensuring that your marriage is equitable for both parties. Today, we're dispelling some common prenup myths you've probably heard before.
Myth #1: Prenups Are Only for Divorce
While it's true that most prenups concern provisions for how parties will divide assets during a divorce, that's not their only purpose. Prenups can also specify how you and your soon-to-be-spouse will draft an estate plan (for example, whether you will include any children in your living will, to what capacity, whether you give each other the medical power of attorney, etc.).
For this reason alone, prenups can be incredibly useful. Estate planning is often stressful for most people, so getting it out of the way—and with your partner's support—can get your marriage off to a great start.
Myth #2: Wanting a Prenup Means You Expect to Get Divorced
Prenups don't only enable you to protect your assets—they can also help protect your spouse from any risky investments or financial decisions you make. For example, let's say you own a business. Your spouse helps you come up with an idea that improves your business. Typically, this would make your business marital property, even if your spouse never contributes to your company again, or doesn't contribute regularly.
Now, let's say that you make a bad investment decision and your business goes under. If the business was considered marital property, your spouse might end up with business debt because of your risky investment. Seems unfair, right? A prenup can allow you to specify that your business will remain separate property even if your spouse contributes, or that you'll take the fall for any investment decisions you make.
Myth #3: Prenups Are Only for Rich People
There's a reason more and more millennials are getting prenups, and it's not because they're all tycoons. Prenups specify how all assets—regardless of value—get divided in the event of a divorce. Since property division is often one of the most contentious aspects of divorce, getting it out of the way now can help you maintain a healthy marriage (and make divorce significantly more straightforward, if it does occur).
At the end of the day, a prenup can be an incredibly useful tool for married couples.
If you're considering a prenup but don't know where to start, you can reach us for a consultation by contacting us online or via phone at (636) 400-1177.