Prenups are the hot topic among the millennials today. They are increasingly thought to be an essential aspect of the marriage contract. They are worth considering if one of you earn more than the other spouse or own assets more in value than the others.
Justin Bieber’s net worth estimated at $265 million and Hailey Baldwin’s net worth at $2 million showcases us a perfect example of the tremendous imbalance of wealth. Based on how the marriage turns out later, not having a prenuptial contract could make Hailey face a big payday in the future.
“The biggest benefit of a prenuptial agreement is that it gives respect to your property and assets ownership in addition to the expectations and rights of your spouse.”
While you may want to avoid taking up this subject for discussion with your spouse, it is inevitable that you could guarantee financial freedom and asset security at the event of a divorce without a proper prenup agreed on before. Before we go on to find out why a prenup matters let us see how prenups actually work.
What is a prenuptial agreement a.k.a prenup?
A prenuptial agreement is the private contract signed between a couple stating who owns what in terms of estate, property, belongings and even pets. Moreover, the terms of a prenup can also contain details as to who would be responsible to overtake financial responsibility of certain things in the house each. This information is important in setting forth the agreement over the division of assets between the couple in the event of a death or a divorce.
Fortunately, each state has its own governing laws regarding the prenuptial agreement for its citizens. So the validity and enforcement law for your prenup may depend largely on your state’s laws in the US. Though it would solely depend on two conditions while deciding which law would apply:
- Where the marriage occurred;
- Where does the couple live at present;
The couples would, statistically speaking, almost always choose a state which will be most accommodating in carrying out their desired conditions on the prenuptial agreement. Also, you need to be very fair while agreeing upon signing of a prenup. You should always declare all of your assets honestly to avoid future troubles in marriage or worse, lawsuits in the event of a divorce.
It is evident that the number of couples signing on a prenup agreement is on a constant rise, according to a survey by The American Academy of Matrimonial Lawyers. Almost 2/3 of the people in the survey showed willingness to signing a prenup in the event of a marriage. While many couples would naturally want to avoid the subject, it would be best if you settled this one equation early on.
So where does this leave you?
Yes, we understand, prenups can be unromantic and outright scary if not done properly, especially if you are just about to tie the knot. Still it is the most important matter in a marriage to discuss and communicate on clearly with your spouse. It will have long lasting and probably permanent consequences for both of you down the road to happily ever after.
Why should you sign a prenup?
Let us be honest, it is very common that couples are lovey-dovey in the initial period of marriage and this is when many of them fall into the trap of not communicating the finances because ‘until death do us part’. Sadly, the financial matters do not always remain in the honeymoon phase of a marriage meaning you cannot avoid the financial talk forever! Imagine if Justin and Hailey get separated without a prenup, Hailey would walk away with no security and perhaps even less than her initial $2 million because she spent it taking care of the household and whatnot.
A prenup agreement would not only clarify your financial rights and obligations in the marriage but also make sure you get the financial protection in the relationship getting the question of financial insecurity out of the marriage. It is vital to secure the interests of you and your soon-to-be-spouse-till-death-do-us-apart.
Fortunately, most prenups will allow each party to leave their separate property to whomever they want, while requiring some provisions for the surviving spouse. A prenup could also contain a term that any assets that the couple earns during the marriage would be considered marital property subject to division. So any monies earned by Justin or Hailey during the marriage will divided between them.
Another provision of a prenup is it doesn’t allow a couple to compromise on their child’s financial security – meaning, a prenup cannot provide for or even limit a child support or other forms of your child’s financial security such as a trust. Courts in almost all the states in the US do not allow any of the parent to bargain away their child’s rights. If a father dies first, he can choose to leave an estate plan in a will subsequently also making sure that the mother would have enough to care for the household and herself and vice versa. For instance, if Justin dies first, his estate plan can leave most of his assets to his children (if they have any) or other family members, caretakers of children, friends and trusts, but it can and should provide sufficiently for Hailey.
Whether you’re engaged, happily married, or unhappily married. Now is a great time to sign a prenuptial agreement or in Justin’s case a postnuptial agreement! You can contact a professional family lawyer to assist you draft the prenup agreement legally.