Some couples avoid creating a prenuptial agreement because they think that it is unromantic and that they will never be divorced. They may be right. A prenuptial agreement might not be romantic and the couple may stay married until death do they part. However, a prenuptial agreement is still important for them.
A Prenuptial Agreement Promotes Honest Communication about the Couple’s Finances
In order for a prenuptial agreement to be enforceable, each spouse must provide a fair and accurate disclosure of his or her property and financial obligations to the other spouse. That means that the very act of creating a prenuptial agreement should lead the couple to honest and complete communication about what they own and what they owe. With that knowledge, the spouses can work together to create a financial strategy that is beneficial to them as a married couple. Also, the attorney who works with the couple to create the prenuptial agreement can often help the couple with estate planning strategies based on the information that was shared while drafting the prenuptial agreement.
A Prenuptial Agreement is a Useful Estate Planning Tool
As much as we’d like to believe that marriages will last forever, every marriage ends either by divorce or death. A prenuptial agreement can be a useful part of a couple’s estate plan. For example, a prenuptial agreement can be used by a spouse to sign away his or her rights to be the beneficiary of an insurance policy or retirement plan. This is particularly important if the spouse is required by law to be a beneficiary of such a policy absent an agreement otherwise. A prenuptial agreement can also be used by a spouse to sign away his or her rights to the statutory spousal share of the other spouse’s property when the spouse passes away.
Married Couples Should Periodically Review Their Prenuptial Plans
Spouses who remain married should be aware of the contents of their prenuptial agreement and review it periodically, as they do their other estate planning documents, because their circumstances might change and they may wish to amend their original prenuptial agreement. Prenuptial agreements are easy to amend. Most states require that amendments be in writing and be signed by the spouses. The same rules of enforcement that apply to prenuptial agreements apply to prenuptial agreement amendments, meaning that each spouse must provide the other with a full and fair disclosure of his or her finances, the amendment must be made voluntarily and the amendment must not be unconscionable.
A party may wish to amend a prenuptial agreement if, for example, one or both of the spouses had minor children at the time the original prenuptial agreement was executed. The original prenuptial agreement may have financially provided for those minor children before providing for the spouse. However, as the years pass those minor children may be adults and financially independent and the spouses may agree to leave more assets to each other in the case of divorce or death.
Prenuptial plans are important tools for couple who stay married, as well as couple who divorce. A prenuptial attorney in your state can provide you with additional information about how a prenuptial agreement can benefit you and your future spouse.
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