(Republished and reposted 2/25/2017)
Premarital agreements also called prenuptial agreements can cause a good deal of stress and anger between soon to be spouses. They can cause your fiance to believe that you don’t trust them or that your not “all in”. Unfortunately, people see premarital agreements as divorce planning, sort of a downer from the start.
But really, premarital agreements have just as much to do proper planning for the marriage rather than the outcome of divorce.
Here are 10 purposes served by planning a premarital agreement that have nothing to do with splitting the couple up:
- Premarital agreements can protect one prospective spouse from the premarital debts of the other. This can be useful where bad credit and debts are still haunting one of the partners coming into the marriage.
- Blended families, those with children from previous relationships, can use premarital planning to give clear distribution instructions to children from earlier relationships.
- Premarital agreements can be used to create a life estate for spouses-to-be to care for them after the death of one spouse and preserve inheritances to beneficiaries other than the spouse.
- Couples can avoid financial disputes during their marriage by specifying how community and separate property is defined between them.
- Self-employed spouses can use a premarital agreement to protect family assets or the assets of the working spouse in case of business bankruptcy or suits.
- Medi-Cal (California’s Medi-caid), ignores premarital terms that attempt to avoid the duty to support one spouse by the other. But, in the case of divorce to avoid Medi-Cal support obligations, a premarital agreement can insure that the non-hospitalized spouse retains ownership of their property.
- Ownership interest and voting rights in LLCs and closely held corporations can be manipulated within premarital plans satisfying membership agreements and investment requirements.
- Premarital agreements can establish property ownership of real estate acquired during the marriage with pre and post-marital assets. This is extremely important where one or the other spouse engages in business that can be a victim of lawsuits that might endanger community property.
- Rental property income from premarital acquired rental property can be defined as separate, community, or transferred to the non-owning spouse.
- Premarital agreements can provide terms and designations for one spouse’s preference for guardianship and conservatorship in proper contexts.
Talk to a qualified attorney before you begin working on your premarital agreement. A proper agreement can enhance and protect the marriage rather than be an plan only for divorce.
Featured Image: CA Bride and Groom by debaird at Wikimedia Commons