Prenuptial agreements may not be terribly romantic, but spouses who enter into one are often awfully glad that they did. This document can hedge against disaster if you divorce. It creates a game plan for how you're going to deal with financial issues during your marriage and can also serve as an estate-planning tool.
Advantages of a Prenup
Prenuptial agreements are enforceable contracts entered into before marriage that can override state law in the event of death or divorce. For example, if your spouse helps make the mortgage payments on your premarital home, its value or equity may become subject to division in a divorce. You can agree in a prenup that your spouse's earnings will go toward other expenses, or that the house will remain your separate property. You can also waive your rights to inherit from each other, or decide what those inheritances should be. Without a prenuptial agreement, you would each be entitled to a statutory share of the other's estate under the laws of your state even if you leave a will stating otherwise. Your children from prior relationships – or other beneficiaries you'd like to name – could be left out in the cold.
Make Sure It's Valid
Having a prenuptial agreement is only prudent if the court doesn't disregard it as invalid. A number of things can cause this to happen, some of them dependent on state law. For example, you and your spouse must fully disclose all your assets and debts. Many states require that a certain period of time pass between the signing of the agreement and your wedding to avoid any appearance of coercion.