Utah has one of the highest rates of marriages taking place per year in the country, which means there are a lot of people here talking about the future. Before tying the knot, and even before getting engaged, couples should discuss the benefits of a prenuptial agreement, and decide well in advance of the wedding if they need one.
The Purpose of a Prenup
A prenuptial agreement is a contract drawn up between two people before they get married. It deals with financial issues and can serve two main purposes. The first is to outline what the financial expectations and responsibilities of each spouse will be throughout the marriage. The second is to declare how assets will be divided should the marriage dissolve, either because of the death of one of the partners, or because of divorce.
Both parties should retain their own lawyer to help decide on terms for the prenuptial agreement. This will make sure that each party is represented fairly, and ensure the validity of the agreement. A judge may not honor a prenuptial agreement if one of the parties was not legally represented when it was written and signed.
Items to Include
Prenuptial agreements are not only used in in the case of a divorce, they can also be used to protect spouses interests while still married. If you’re trying to decide whether you need a prenup or not, keep in mind the following issues that are commonly addressed in the agreement.
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Clarify financial practices and expectations: For example, will you be filing income taxes jointly or separately? Will you have a joint bank account, and who will manage it? How much of your income should be allocated for savings? Do you wish to keep your debt separate? Who gets what in the case of a divorce?
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Decide how all of your children will be provided for now, in the case of a divorce, and after your death: This is especially important if either of you have children from a previous marriage.
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Protect premarital assets and heirlooms: If you own a home, a business, have valuable heirlooms, or all of the above, you may want to specify that they are not community property.
When a Prenup is a Necessity
There are a few situations where it is especially wise to obtain a prenuptial agreement. If you have children from a previous relationship, you need to make sure that they will be provided for throughout your marriage, and especially in the case for your death. If your future spouse is still responsible for alimony or child support payments from a previous relationship, you need to specify that these payments remain their sole responsibility. If you have considerable assets acquired before the marriage, or expect to acquire considerable assets after the marriage that you can’t afford to lose in a divorce, a prenup can protect them. An example of this would be a growing business that would not survive if it had to be split up, or if you had to buy your spouse out of it in a divorce.