What Is the Purpose of a Prenup?
A prenuptial agreement—commonly known as a “prenup”—is a contract which a couple enters prior to marriage. The purpose of a prenup is to establish guidelines and rules on how assets and debts are divided in the event the marriage ends in divorce.
In order to create a fair and valid prenup, both parties must disclose each of their finances. This can be done by completing a financial disclosure statement, which identifies all assets and debts.
What to Include in a Prenup
The following are several things to include in a prenuptial agreement:
- Distinctions between marital and separate property – Marital property includes assets the couple acquired throughout the marriage, while separate property includes assets which a spouse owned before getting married or assets which were gifted or given through inheritance. In general, if you can prove that you were the owner of a specific asset prior to marriage, it will still be considered separate property. You and your spouse can determine how separate property is treated and how marital property is divided.
- Protections against the debts of the other spouse – Without a valid prenup, your marital property can be subject to creditors—even though the only spouse is the debtor. Limiting your debt liability, instead of having each spouse owe half of everything, can substantially limit the stress of a divorce.
- Waivers of alimony rights – In most marriages, the lower-earning spouse may be entitled to alimony payments from the higher-earning spouse. A prenup can help impose certain spouse support provisions or even waive a spouse’s right to a prenup. However, if the judge considers the provisions to be unfair, the court could terminate it.
- Provisions for children from previous marriages – You can use a prenup to ensure that your children from a previous relationship will inherit some of your property, thus preventing accidental disinheritance.
- Protections from estate plans – Prenups are also a great estate-planning tool, ensuring that your plan is fulfilled to your wishes. Keep in mind, you must also create wills, living trusts, and other estate documents to protect your family’s future.
- Descriptions of each spouse’s responsibilities – Not only does a prenup outline who gets what when the marriage ends, but also describes each spouse’s marital responsibilities, such as who will take care of the household expenses, how joint bank accounts are managed, the contributions of each spouse to the savings account, and even how disputes are handled.
- Sunset clause – Unfortunately, prenups are not the most romantic thing in a marriage. Sometimes, it can discourage a significant other from getting married in the first place. To ensure your marriage is a long and happy one, you can include a sunset clause which voids the agreement when your marriage lasts a certain amount of time.
If you are interested in drafting a prenuptial agreement in Des Moines, contact our experienced legal team at Family Law Solutions of Iowa, LLC today.