A prenuptial agreement, or prenup, is a contract entered into by two parties before they get married that typically resolves any financial or other issues that may be contested, in the event of a divorce. A prenuptial agreement is a written understanding between the parties of how they will, or will not, divide financial assets if they get divorced. It does not address what happens if one party dies, only in the event of divorce.
Everyone should consider a prenuptial agreement. More specifically, anyone with significant preexisting assets, perhaps a business, investment accounts, or real property, may feel comforted by having a prenuptial agreement. A prenup can also be useful for later avoiding alimony.
Prenups are generally worded, not specific, the way a separation agreement is. If you’re already married and getting divorced, you may come up with a written agreement that specifically details what happens with each asset. A prenuptial agreement may not be that specific but is a good idea for anyone who is getting married.
The two biggest ways you will benefit from a prenuptial agreement are: (1) if you are far wealthier than your spouse, either now or in the future; or (2) if you have assets you would like to protect and keep as your own in the event of a divorce. A prenuptial agreement can resolve the issue of alimony, so you don’t have to worry about that later. It can also clarify which assets are your separate assets and will not be part of the marital assets, avoiding a later dispute.
No one walks into a marriage with the intention of getting divorced. In the event you do get divorced or separated, several things become contested issues. A prenup helps parties avoid having that fight. When you’re both getting along, both feeling fair and reasonable, you decide whether you’re going to keep your financial assets separate or are you going to share certain assets. You decide what you think is fair at the time of your marriage.
If unfortunately, things don’t go well and you do get divorced, you don’t have anything to fight about. It allows you to have an amicable divorce, or at least to not spend a ton of money on attorneys going through a contested divorce.
When I talk to people who are divorcing, particularly after a long marriage, the thing I notice most is they don’t have any idea what the law is about marital property. A lot of people don’t understand, even if the house is in your name and you’re on the mortgage, it’s still marital property; your spouse is still entitled to some value from it. The same is true of retirement accounts, military or federal government retirement accounts, pensions, etc. that’s all marital property and subject to division.
So, another benefit to a prenuptial agreement is, if you have an attorney draft your prenuptial agreement, it’s a way for you to understand what marital property is and how it gets divided upon divorce. You can make reasonable decisions about it in your prenup.
You can also execute a similar agreement after you get married, the terms may be the same or similar, it’s just called a postnuptial agreement and it will carry the same weight. It is a contract that resolves issues that would otherwise be contested if you get divorced.
For more information on Divorce Law in Maryland, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (443) 300-2335 today.