A prenuptial agreement is actually a legal agreement specifying exactly how the division of assets would take place in the event of a divorce. With the increasing prevalence of divorces it makes good sense to enter into a prenuptial agreement as per common statutes of Family Law prevalent in the USA. There has been a distinct rise in the number of women insisting on prenuptial agreements, for safeguarding their assets.
Prenuptial Agreements Protect Financial Stability
In the absence of any prenuptial agreement, it is generally held that both the partners in marriage equally share all the assets as well as debts. This is irrespective of whose name might be present on official documents such as title, deeds or mortgages In the event that both the partners have not contributed equally in building up the assets, it could spell disaster for the partner who had contributed more.
Since the process of drawing up prenuptial contracts necessitates identification of joint marital as well as individually-owned assets, it serves to safeguard inherited property such as family heirlooms. One of the greatest benefits of prenuptial agreements is that they serve to protect the interest of the children.
In the absence of this contract, it is possible that following divorce, one partner may receive assets that were originally intended for the children. While many couples work constructively for the welfare of their offspring even after deciding to end their marriage, an appropriately-worded prenuptial contract can prevent any one spouse from taking control over assets for his or her selfish benefit.
Reduces The Opportunity For Potential Conflict
It is common for most people to react negatively when a discussion on prenuptial agreements comes up as they were perceived to be devices by which the more affluent partner could shut out the spouse from enjoying the benefits of the wealth in case of the marriage dissolution. It was also seen to be extremely unromantic, calculative, and corrosive to the trust essential for marriages to work.
However, upon a rational evaluation, it must be acknowledged that prenuptial agreements play a vital role in reducing the potential for conflict as the agreement dictates how a lot of issues will be handled when the union runs aground. It is possible for these contracts to also specify the basis and extent of spousal support.
More about Planning Than Protection
Despite the many arguments offered against prenuptial agreements, they help to consolidate a marriage and form an integral part of family law existing in the USA. These contracts that have full legal sanction under USA’s family law play a very important role in planning affairs and assets of the family in a way that is completely legal and tax-efficient for both partners.
Evaluated dispassionately, it will be very evident that both partners are afforded significant advantages by these agreements. Protection for children from earlier marriages, protection from personal debts, financial guarantees and malpractice claims are some of the many situations that can be handled with ease in the presence of a prenuptial agreement.
The American family law accepts the role of these contracts to facilitate tax planning for estate and gifts. The fundamental reason why prenuptial agreements find a significant mention in family law is that they basically ensure a couple does not marry for financial exploitation and they provide a platform for dealing with financial assets in a fair and transparent manner.