Preparing to get married is often one of the major highlights in the lives of many Colorado residents, which can make talks about a prenuptial agreement incredibly awkward. However, with the divorce rate at nearly 50 percent, speaking with a potential spouse about the need for a prenup in the event of a divorce can facilitate honest communication about finances and relationship expectations. The unfortunate part of those wishing to speak about a prenup with their soon-to-be spouse is the negative opinion people have about this sometimes necessary document.
Why A Prenup?
While many people understand that the basic premise of a prenup is to protect assets in the event of a divorce, it reportedly has an additional benefit as an estate planning tool. For those who are entering their second marriage or those who have waited until later in life to marry, protecting previously acquired assets may be very important. It is important to remember that a prenuptial agreement should not work against an established estate plan.
A prenup is important for couples in which one party brings far more wealth into the marriage than the other. Whether it is through an inheritance, a business or simply a long history of making solid financial decisions, the assets that are brought into a marriage should be protected from potential loss. In the best case scenario, those protections will never need to be called into action. That does not negate the need to set them up in the first place, however.
Another scenario in which a prenup is a good idea is when one party is planning to set aside his or her career path to raise a family. If a spouse is willing to make that choice, he or she will almost inevitably lose out on career advancements that are earned by spending time in one's field. If he or she ever needs to re-enter the workforce, such as after a divorce, it can be expected that the starting salary would be far less than if the worker had remained active in the workforce. In this case, a prenup can ensure that the stay-at-home parent would be financially supported in the event of a divorce.
Prenuptial Agreement Considerations
Colorado residents should give a prenuptial agreement the same amount of consideration as any other aspect of wedding planning. Creating this document takes relatively little time and effort. More importantly, having those protections in place can make a world of difference if happily ever after turns into something other than what was expected, and property division becomes a necessity
Creating A Prenuptial Agreement
The process of creating a detailed prenup and estate plan will require that interested parties consider a variety of factors. In many cases, one of the major concerns people face is how to best protect their children and property. This can mean creating stipulations within the agreement that protect certain financial or property interest for the eventual transfer to an individual's children. Additional concerns may also include possible rights associated with a surviving spouse, tax exemptions and debt liabilities.
For some Colorado residents, deciding the best way to protect a lifetime of assets is a major concern. While prenups do not have the most positive reputation, there are valuable benefits for those who may face the possibility of divorce. In some cases, people are unprepared for what financial hurdles they may encounter once the divorce is finalized. Some of these unexpected hurdles may be prevented with the implementation of a prenuptial agreement.
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Source: womenmoneyanddivorce.com, "P is Prenups as an Estate Planning Tool", Ann Zuraw, Sept. 8, 2014