A prenuptial agreement is essentially a contract between yourself and your future spouse. It lays out how you’re going to deal with assets, liabilities, and alimony in the case of a divorce. There are many reasons to consider a prenuptial agreement. Tampa Divorce Attorney, Paul Knudsen, outlines the 7 most crucial reasons below:
Save Yourself Money
The first reason you should consider entering into a prenuptial agreement is that it could save you tons of money in the long haul. As we all know, divorces cost a lot of money to litigate. Litigation is the trial aspect of a divorce. It’s filing motions. It’s going to hearings. It’s arguing over this point and that point.
Well, if you have a prenuptial agreement, it lays out exactly how you’re dealing with all those points and there’s really nothing to argue about any longer. It can save you tens of thousands of dollars, sometimes hundreds of thousands of dollars, if you’re willing to do the work and make the expense upfront.
Plan Ahead For Alimony
The second reason you should think about entering into a prenuptial agreement is that you can agree on how you’re going to treat alimony in the case of a divorce. Now, alimony is one of the most contentious issues in any divorce proceeding and there are very little guidelines provided by the state of Florida.
The state of Florida has provided that zero to seven years is a short-term marriage, 7 to 17 years is a moderate term marriage, and 17 years or more is a long-term marriage. Now that brings into account each of those different types of alimony that you could be awarded, but it doesn’t provide the duration and it doesn’t provide the amount on a monthly basis.
This is a highly contested issue which costs a lot of money. You could, before even getting married, figure out how you and your future spouse want to treat alimony if it does come to a divorce, which could save you tons of time, tons of money, tons of heartache, and time in court.
Protect Your Business
A third reason to consider entering into a prenuptial agreement is if you have a family-owned or a personally owned business. Now, these are premarital assets, the business; however, as soon as you start earning money during the marriage, the money you earn during the marriage is considered marital.
That money, if you’re not taking it out and putting it in your own bank account, creates part of that business as a martial entity (even if it remains in the business and it’s considered re-invested into the business). If you want to protect yourself from this, you can enter into a prenuptial agreement which states that no part of the business and any of the funds and assets received from the business are going to remain non-marital. This is one of the main driving factors for a lot of people and why they enter into prenuptial agreements.
Protect Your Inheritance
The fourth reason to consider entering into a prenuptial agreement is to protect your inheritance. Now, inheritance by its very nature is considered non-marital. With that said, parties often make the mistake of co-mingling their inheritance, whether it be in a bank account or purchasing some marital funds with the inheritance that then creates it into a marital asset.
Now, you can set out in your prenuptial agreement that’s not going to happen and even if it does happen, that it is still your sole property. It’s a great way of protecting inheritance. Anyone that has a large sum of money coming from family should really, really spend the time thinking about entering into a prenuptial agreement to protect their inheritance
The fifth reason to consider entering into a Prenuptial Agreement is for estate planning purposes. In Florida, as everyone knows, you can enter into will and trusts, but the only way to disinherit a spouse is through a prenuptial agreement.
Florida has elective share laws, which means that even if you write in your will that your wife or your husband is to receive nothing from your estate, they still have the ability to get after part of the homestead as well as a 30% share of the overall estate. The only way to get around that law is through the agreement of a prenuptial or a postnuptial agreement.
So if you have a large estate and you’re later on in life and you want to protect children from a prior marriage, you need to really consider entering into a prenuptial agreement.
Determine Your Financial Plan
The sixth reason to consider entering into a prenuptial agreement is to determine, at the outset of the marriage, how your finances are going to work. Who’s going to pay what bills? How are you going to pay maybe some premarital debt, some premarital liabilities? Are you going to have a joint bank account and will all of your bills be paid out of that?
It’s really important for people to have these conversations, and oftentimes people wait until it’s too late and pretty far into the marriage. They are then at a great point of contention that can sometimes lead to the dissolution of the marriage. But, if you have this conversation from the outset, you lay out exactly how you’re going to do it and wrap it all into a prenup that can have very clear guidance on how you expect to treat the marital bank accounts.
Marrying For The Right Reason
The seventh reason to consider entering into a prenuptial agreement is to make sure that both parties are marrying for the right reason. When you have a party that has a big sum of money in their bank account or makes a lot of money and the other party might not, you need to make sure that they’re marrying for love and not money. A prenuptial agreement is a great way of doing that. It’ll show you exactly what the person’s motivation is behind the marriage.
It’s very important for someone in the position of having a lot of money and going into a marriage with a lot of money, to protect themselves and their future generations.
It’s important that when you set a prenuptial agreement, that you do it right to avoid having your prenuptial agreement challenged later on.
If you have any questions about prenuptial agreements or want to call us for pricing or to discuss scheduling a consultation for a prenuptial agreement, do not hesitate to reach out to our firm on our main office line, or even on Facebook, to let us know that you need some help or have some questions. We’re happy to help you and guide you along the way in getting a prenuptial agreement done to protect you.