What are the pros and cons of having a prenuptial agreement? – The purpose of a premarital agreement is to create clearly-defined rights and obligations for couples who are about to get married. Think of it just like any other contract you’ve signed in the past, except this one is between you and your soon-to-be-spouse and goes into effect on the day you officially tie the knot.
While not mandatory according to any law, many people feel premarital agreements, or prenups, are necessary and base them on their specific relationship or current situation. And as Hamlet once said, therein lies the rub. While there are logical reasons for many couples out there to go forward with executing a prenup, do those reasons apply to you? In other words, do you really need it, and have you thought about both the pros and cons to signing one?
Pros:
- To preserve family fortunes for children, perhaps from a prior marriage
- To eliminate, limit, or set any future alimony obligations
- Predetermine rights and duties during a marriage, including child care, career sacrifices, et cetera
- Clearly define which property belongs to each party, how taxes will be filed, or to separate income
- To ensure a specific religious upbringing for a child
Cons:
- Potential trust issues, friction, and resentment, as if one spouse believes the other is planning for a future divorce
- A naive spouse could agree to something that heavily favors their significant other or flat out isn’t in their best interests, now or in the future (example: giving up rights to inheritance upon spouse’s death)
- If both spouses enter the relationship on a level playing field financially, a prenup may be more work than it’s worth
- Certain expectations and duties outlined in the prenup today may be unreasonable 25 or 30 years down the road
- The agony over whether or not you should sign the prenup, to begin with, and if it’s right for your marriage
For more information on premarital agreements and what they entail, click here. There are also different types of marital agreements for before and during a marriage. You can read about those here.
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