What factors determine whether a prenuptial agreement is a good investment?
A prenuptial agreement or “prenup” has become one of the most common ways for individuals to protect themselves from significant losses while going through a divorce. This document can be viewed and agreed to by both parties to the marriage as a binding way of committing to a certain property distribution if the marriage ever dissolves. It functions almost like a kind of insurance for your assets when the marriage fails.
Disclosing assets and being honest about finances
One of the most important aspects of a prenuptial agreement is that is accurately discloses all of a person’s assets. As a basic principle of contract law, there cannot be hidden or omitted terms that are expected to be enforced by the courts in Maryland or any other state at a later time.
All personal and real property items, even including things like pets, should be listed in the document and explained in order to avoid confusion or additional litigation later. It is always better to include something in the agreement rather than deal with court battles and legal fees. This can also include investments and any other assets that may be subject to appreciation. Issues related to children and how much money or property they will inherit are also commonly addressed in prenuptial agreements, as this prevents arguing over distribution of property between a divorced spouse and the other person’s children. Taxation can be addressed in a prenup as well, and this can be simple or complex depending on the couple’s finances and different sources of income and gifts.
Is a prenup worth the initial cost and time investment?
An average prenup can cost up to a few thousand dollars if the couple’s finances are not too complex. Higher cost of living areas like major cities also tend to have higher rates for legal fees and associated costs, so those living in rural areas may spend a little less. If the drafting stage of the prenup also requires negotiations between the spouses, expect this to increase the costs as well, as attorneys and other professionals may get involved and require compensation for their time. Prenups are not normally billed at a flat rate for all of the work involved.
However, this can be well worth the cost, especially in situations where a marriage lasts several years and significant assets begin to accumulate. There have been a number of high profile divorces in the news over the years where one spouse loses millions of dollars during the divorce process. Much of this large loss could have probably been prevented with a properly executed prenup. At the end of the day, each individual and couple who is preparing to get married should evaluate their finances and make a decision based on their personal situation while considering the possibility of future losses.
Learn more about how you can benefit from a prenup
To get in touch with a lawyer who deals with prenuptial agreements and other aspects of family law in the Rockville area or nearby parts of Maryland, contact Barkley and Kennedy, Chartered. They have received numerous professional accolades over the years related to their superior representation.
