A recent Business Insider’s article, “Ask a Financial Planner: ‘What should I include in a prenup?’,”says that the first thing to do is decide if you’ll need a prenuptial agreement, also known as a “prenup.” Do this by asking yourself, “What purpose do I want the prenup to serve?” If the document is intended to protect the assets you’re bringing into the marriagesuch as a business, big-time investments, or rental propertyspeak to an estate planning attorney about the benefits of a prenup.
Other folks who will have prenups drafted are those who marry later in life and have acquired assets on their own and/or were married before. They want to be clear on how their assets would be divided if there were a divorce. This is especially important with blended families.
A prenup can simplify a divorce and lessen conflicts. The spouses understand how property and assets would be divided in a divorce. Divorce can be sticky, especially when there are significant assets involved. If that’s the case, you need to talk with a qualified estate planning attorney to draft a prenuptial agreement. While you’re at it, put all other estate planning documents in place, like a will, trusts, powers of attorney, and health care directives.
The basic issues to address in a prenup include:
- A description of separate property versus marital property;
- How to distribute debts;
- How taxes would be treated;
- Spousal support; and
- Who will pay for legal fees
One thing to note is that estate planning laws can be different in each state. Make certain that you talk with a qualified estate planning attorney.
Reference: Business Insider (April 17, 2016) “Ask A Financial Planner: ‘What should I include in a prenup?'”