3 reasons many couples need prenuptial or postnuptial agreements
Prenuptial and postnuptial agreements can help reduce financial losses, make divorce less complex and produce more predictable settlements.
To many engaged or married couples, signing a prenuptial or postnuptial agreement may sound pessimistic or unnecessary. Unfortunately, though, about 40 percent of marriages end in divorce today, according to U.S. News. Many divorcing couples may face needless complications because they opted not to forge prenuptial or postnuptial agreements. Before deciding to forgo these agreements, couples in Charlotte should consider the following benefits that come with drafting one.
1. Predictable property division
U.S. News notes that it can be difficult for divorcing spouses to predict how their property and debt will be allocated if a judge must determine the arrangement. This is especially true in North Carolina, since the state follows equitable property distribution laws. Under these laws, all marital property is subject to division between both spouses in a manner that a judge deems equitable.
Family law judges can use many criteria to make this decision. Some variables, such as the length of the marriage and the income of each spouse, are objective, but others are not. For example, a judge may consider how one spouse contributed to the career or earning power of the other and award property accordingly. A prenuptial or postnuptial agreement can remove any uncertainty about property division from the divorce process.
2. Financial protection
By stipulating how asset division and alimony awards will be handled during divorce, prenuptial and postnuptial agreements can protect spouses financially. These agreements typically offer benefits for spouses in all of the following situations:
- A spouse is bringing valuable or sentimental assets into the marriage and wants to ensure that those assets remain his or hers.
- A spouse has children from a prior marriage or other dependents to provide for.
- A spouse is leaving the workforce or giving up career opportunities in order to support the other spouse or raise children.
- A spouse wants to maintain rights to all earnings or other income made during the marriage.
Spouses who face other complex financial issues may also benefit from creating a legally enforceable agreement that is tailored to their circumstances.
3. Simplifying the divorce
A prenuptial or postnuptial agreement can greatly reduce the time and expense involved in reaching a divorce settlement. U.S. News notes that creating these agreements typically costs, on average, significantly less than an engagement ring. This makes drafting one of these contracts a worthwhile investment for most couples, especially considering the financial burden that divorce can create.
Creating an optimal arrangement
Although prenuptial and postnuptial agreements offer many benefits, they must be drafted carefully to ensure they are valid and don’t unfairly favor one spouse. U.S. News notes that many spouses draft these agreements under time constraints, which can increase the risk of oversights or bad decisions. Additionally, an agreement may be challenged later if it favors one spouse or apparently was signed under duress.
Given these potential stumbling blocks, engaged couples or married spouses can benefit from meeting with an attorney to discuss their options. An attorney may be able to offer advice or assist spouses in drafting one of these agreements.