While a prenuptial agreement, often shortened to prenup, has historically suffered from a negative connotation, they have become more of a staple in modern marriages. Whether from personal anecdotes or their portrayal in popular media, individuals used to equate a prenup with someone who was already planning for divorce – even before the marriage. Now that divorce, remarriage and blended families are common, people see prenuptial agreements for the beneficial tools they are.
The prenuptial agreement is a document that lets couples clarify the assets and debts each party is bringing into the marriage. In the face of a subsequent marriage or a couple with a significant disparity in wealth, both parties might agree that a marital contract can help them clearly define the financial aspects of the relationship, including:
- Documentation that ensures separate property remains separate property
- Documenting separate debt including personal loans, credit cards, student loans and mortgages for separate property
- Documentation that the couple creates to support financial information included in an estate plan
After the marriage, couples can continue cataloging their assets and debts by using the post-nuptial agreement. It is essentially the same type of information that is included in the prenuptial agreement, it simply happens after the marriage rather than before.
Couples use the prenuptial agreement as a means to avoid disputes or emotional debates should divorce become a reality. When a marriage lasts for years or decades, the lines between marital property and separate property can become blurred. Fortunately, these documents help couples clarify ownership of assets and debt responsibility.