6 Reasons You Need a Prenuptial Agreement
A prenuptial agreement is never a romantic proposition. However, having a tough conversation with your spouse now, may help alleviate a lot of heartache in the future. Divorce litigation in Florida can be lengthy, stressful, and expensive. While no couple ever anticipates a divorce, a prenuptial agreement acts as a safety net in the event a divorce becomes necessary. Depending on your circumstances, it may be a good idea to execute a prenuptial agreement.
1. You own a business.
If you own a business, you need a prenuptial agreement. The business or any increase in the value of the business may be considered marital and subject to equitable distribution during a divorce. A prenuptial agreement can significantly limit your liability for having to sell or liquidate your business to satisfy your equitable distribution obligations. Alternatively, your spouse could receive shares in your company after the divorce leaving you with an unwanted business partner. Learn more about business valuations during divorce.
2. You have children from another relationship.
In the event of your untimely death, you want to make sure that your children are protected and that all of your assets will not pass to your spouse. It is a good idea to ensure that you have both a strong prenuptial agreement and a proper estate plan established to make sure that your children are protected.
3. You or your spouse intend to quit working.
Alimony is one of the most contentious issues during a divorce, which may lead to lengthy and costly litigation. A prenuptial agreement can limit or eliminate any potential alimony dispute. Prenuptial agreements allow you to negotiate and predetermine whether either party will have an alimony obligation. While most people never think that their marriage will lead to a divorce, having a prenuptial agreement in place may save you time and money in the long run. Learn more about alimony in Florida.
4. You or your spouse manage money differently
If you have any concerns about your spouse’s spending habits, it may be a good idea to get a prenuptial agreement. Any debts, including credit card debts, acquired during the marriage are typically considered marital. Even if the debt is solely in your spouse’s name, if it was acquired during the marriage, it is a marital debt. A prenuptial agreement may help eliminate concerns about your spouse acquiring large debts, which you may be liable for in the event of a divorce.
5. You have previously been divorced.
If you have previously been through a divorce, you probably already know the importance of having a prenuptial agreement. Additionally, those who are getting married for a second type may have different financial concerns. It is important to ensure any assets that you are bringing into the marriage are protected and eliminate any potential claim that those assets are marital.
6. You have significant assets or expect to inherit a significant amount of money
An inheritance is typically considered non-marital, unless it is comingled. However, even using marital efforts to manage the money could make all or a portion of an inheritance marital. If you have received a large sum of money or are expecting an inheritance, it is a good idea to get a prenuptial agreement to make sure that the money is protected. Additionally, a court may impute a reasonable rate of return on any investments that you may have, even non-marital ones, and consider that return as income for alimony purposes.