When people marry, they often believe that their union will last forever, but many marriages end in divorce.
That’s why it’s important to consider protecting yourself with a prenuptial agreement. This legal document spells out how your assets will be divided if your marriage ends. It can also prevent lengthy and expensive court battles, in which the only winners are attorneys who bill by the hour.
Of course, this is not to say that everyone must get a prenup. Not every needs one, as Money Talks News founder Stacy Johnson details in “Should Everyone Have a Prenup?”
At the same time, many people stand to benefit from a prenup — whether the agreement is for their own marriage or that of an adult child.
What follows are several advantages of a prenuptial agreement to consider before determining whether you — or your offspring — should pursue one:
1. Avoid the state dividing your property
Each state has its own rules and regulations governing how property is divided in a divorce.
If you don’t have a prenup, it is likely that a judge would determine how to divide your assets based on the judge’s interpretation of state statues.
For example, as we report in “10 Hazards of Divorcing When You’re Older,” Washington state is one of several community property states. In states with community property laws, assets acquired during a marriage are generally divided 50/50 in the absence of a prenup.
Washington is also where Amazon is headquartered and where Amazon CEO Jeff Bezos owns a home. After he and his wife, MacKenzie S. Bezos, recently announced plans to divorce, it was reported that they did not have a prenup to govern what would happen to their estate valued at $137 billion.
2. Ensure family assets stay in the family
Even if you don’t need or want a prenup for yourself, you might benefit from an heir getting one.
Sometimes parents ask their adult children to sign prenups. Gabriel Cheong, a divorce and family law attorney in Boston, says that’s because the parents don’t want any of the money they plan to leave to their offspring going to a former son- or daughter-in-law.
3. Guarantee a fair distribution of assets
Jeff Bezos got married well before becoming the richest man in the world. But when someone marries a partner with significantly fewer assets, the wealthier spouse is at risk of losing much of their wealth in a divorce.
“If you’re coming into the marriage with a lot of assets and your partner is in a different situation, you may want to protect what you earned before marriage,” Cheong tells Money Talks News. “This is especially true if you’re older, retired or about to retire, because you simply don’t have the time to make that money back if there’s a divorce.”