Your prenup protects you. You’ve heard all of the divorce statistics. Perhaps people even expressed their concerns when you told them about the engagement. You weren’t angry. Those concerns are merely realistic. No one gets married hoping to get divorced, but many marriages end that way.
Why not be ready? You can use a prenup to protect yourself from future unknowns. Ideally, your marriage will be beautiful and last for the rest of your life. But it doesn’t hurt to protect yourself, your children and family inheritances if something should happen.
As you draft your prenuptial agreement, make sure you do not forget these five important things:
1. Your spouse’s debt
Does your spouse have a $40,000 car loan? What about $100,000 in student loans? Is he or she planning to take on more debt after you tie the knot? Adding past and future debt into the prenup can help protect you from spending years paying off an ex’s debts after divorce.
2. Your ring
Did you and your soon-to-be spouse exchange rings? Engagement rings often get purchased months or years before the wedding day, and even wedding bands get purchased in advance, to be used on the big day. Getting one from your significant other means it’s a gift. Make sure the prenup notes that it’s yours and that it’s separate property that you are bringing to the marriage.
3. Your company
If you own a business, it should be the first thing listed in your prenup. Under no circumstances do you want to give up ownership or find that you “owe” business assets to your ex as you divide property. Set aside the company and all cash and assets under its control so that they aren’t a factor. Without this, a divorce could ruin your business.
4. Your pets
You think of your pet just like a child. However, it’s not. You cannot address child custody in a prenup, but your dog or your cat is technically property. Make sure you keep your best friend if you and your spouse should go separate ways.
5. Unexpected spending
One thing to consider is that money often drives a wedge between couples. Do you worry that your spouse will spend far more than the amount with which you’re comfortable? In some cases, wayward spending can even propel a family toward bankruptcy. Whether it’s frivolous purchases, a gambling addiction or something else entirely, you may want to cover yourself so that you can recover wasted assets by getting a larger share of the remaining marital property or avoiding taking on the debts.
Drafting a prenup
When drafting a prenup, it’s incredibly important to consider all of your options carefully. Prenups are powerful when they’re properly drafted in advance.