Generally, premarital agreements help protect someone’s riches. The spouses make financial agreements that can allow the wealthier of the two to keep that wealth. Most of us know this already. There are plenty of movies and TV shows that use prenups as plot devices, portraying rich people fighting over money.
Fewer people know all the other ways spouses can use a marital agreement. Average Americans can benefit from these contracts in several ways. Here are just a few.
Other Financial Matters
People often view prenups through the lens of which spouse can keep what assets. While this can certainly be a part of your marital agreement, you can also use these contracts to make financial decisions for the whole family.
Helping Protect the Children
You can use your premarital contract to set aside money for college or any other needs the kids have. Stipulations can prevent either parent from touching this money outside of its intended use.
Designating Property Owners
You don’t need to be rich to worry about keeping what’s “yours.” Generally, your spouse becomes the co-owner of anything you purchase during the marriage. Imagine someone with an extensive comic book collection. Technically, any time they add to that collection, they could lose that specific piece to their spouse later.
A marital contract can allow you to designate property as being “marital” or “separate.” Marital property is owned by both spouses, and these are the assets that get divided in a divorce. Only one spouse owns separate property, and they are usually free to keep it without quarrel.
Planning and Saving
Prenups aren’t only about whether a marriage will end. They can also benefit couples who stay together forever.
You can use a prenuptial contract as a financial plan. It can create special circumstances for saving money. These savings could be used as a nest egg, as a vacation fund, or for any other reasons. The contract can create rules and stipulations that make sure money goes where it should, and neither spouse can dip into it for any other reason.
Creating Rules for the Marriage
Within a marriage, it’s easy to waste a lot of time and energy figuring out how to live from day to day. Couples can argue about anything from big jobs to doing the dishes.
A marital agreement can help you avoid all this strife. You can use it to assign “roles” to spouses. For instance, one spouse takes care of the cleaning, while the other manages any home repairs.
Remember, a marital contract is a legally binding document. Failure to fulfill an assigned role could become a problem for the person who fails. This fact may be too intense for some couples, but for others, it can provide comfort. Everyone in the home knows exactly what is expected of them, and the contract is a good motivator. It cuts down on confusion and arguments about unfinished jobs.
Law Office of Tzvi Y. Hagler, P.C. can help you create a marital agreement that is just right for you and your partner. If you’re interested in drafting a prenup, set up a time with us online or call us now at (516) 514-3868.