Are you engaged and waiting to get married? Understanding the financial implications of your marriage can go a long way in helping you to make sound decisions regarding the management of your assets. Simply, a prenuptial agreement refers to an agreement in which you and your partner identify the respective assets you have and decide upon their ownership in case the marriage comes to an end. You can benefit from a prenuptial agreement in a situation where you bring personal property into the marriage. The agreement lists pre-marital assets, which will remain under the original owner in case the marriage is terminated. Here are a few circumstances where the prenuptial agreements come in handy:
Children from past relationships
Legally, a child is your legal dependant and beneficiary even if you are not married to the person you had the child with. By signing a prenuptial agreement, you retain the ownership of your pre-marital property. This ensures that any child you had from a past relationship can inherit your personal property acquired before the marriage to your new spouse.
Your spouse's debts
Ownership of property may lead to some debt obligations. In marriage, it is not mandatory for a couple to venture into the same line of business. As you go on with your individual business ventures, debt obligations might arise. For instance, take a case where your partner borrowed money from a financial institution and pledged to repay the money through normal premium payments. After a certain period, the business fails, and they are unable to complete the payment. In such a case, the lender might come after the assets of your spouse to sell them and reimburse the debt.
If there is no prenuptial agreement to separate the ownership of your personal property from marital property acquired together with your spouse, then the pre-marital property might be in danger of being auctioned. It is better if you can personally decide what you will sell to help your spouse cover the debt rather than having any property picked randomly and auctioned.
If you are an administrator of your birth family's property or business that you would like to keep within it, then a prenuptial agreement can help you do that. In case of a divorce or death, the pre-marital property belonging to your birth family will not be included under the property you acquired with your spouse.
Defining how you want to share property
State and national constitutions have laws that determine what a person gets in case of a divorce or separation. With a prenuptial agreement, you can bypass the conditions set by these laws by having an agreement that caters for the distribution of property should things not go well in your marriage. For more information, contact a family lawyer.
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