Some people create prenuptial agreements because they worry about what might happen if they divorce, possibly because they’ve already been married once before. Other people ask their fiancé to sign a prenuptial agreement because they have specific assets that they want to protect.
A prenuptial agreement gives both spouses an idea of what will happen in their marriage and how they would handle splitting up their assets if they divorce. One of the ways of prenuptial agreement influences property division is through the designation of certain assets as separate property.
What sorts of assets might inspire someone to draft an agreement that prevents their spouse from claiming that asset?
For those getting married later in life or after already achieving some career success, their home is likely a big concern. Especially if you own the house outright, you may want your spouse to live there without necessarily developing a claim to ownership of the property. Designating your primary residence or even investment properties as your separate property could be a strong motivator for creating a prenuptial agreement.
A business or professional practice
Maybe you already have a small business that you started years ago, or perhaps you are on the cusp of finishing your graduate degree. Soon, you will need to start your own professional practice.
If you currently own a business or plan to start one in the near future, you can designate the business as separate property in your prenuptial agreement or create a reasonable framework for sharing some of the value that the business or practice represents.
Inherited wealth or substantial financial assets
The more property you have, the more incentive your partner might have in the future to divorce you. Giving them access to or control over inherited assets or your accumulated wealth during your marriage might mean that your spouse then later claims commingling so that they receive a portion of those assets in your divorce.
Whether you already have 20 years of retirement savings set aside or recently inherited money from a family member, you can designate those financial assets as separate property before you get married, thereby protecting your financial stability in the future, even if you do get divorced.
If you have major assets that you want to keep us separate property, a prenuptial agreement can be a powerful tool to achieve that goal. Reviewing your assets and what might be at risk if you divorce can help you decide if a prenuptial agreement is right for your relationship.