7 Reasons You Better Get a Prenuptial Agreement

Âinheritance rights and state your intentions for
A prenuptial agreement is a contract between twopassing on your property at death, it's vital that you
people about to get married that shows exactly howprepare the estate planning documents -- a will, living
assets will be distributed in the event of divorce ortrust, and so on -- that actually transfer your
death. Such agreements have existed for thousandsproperty as you intend.
of years in some form or another.Â
• Define who gets what if you
A common myth is that prenuptial agreements aredivorce. Without a prenup, state law will specify how
only designed for very wealthy individuals and this isyour property will be divided if you ever divorce.
not necessarily true. A person who has managed toThese laws may dictate a result that neither of you
save $25,000 may be more protective of their littlewants. You can use a prenup to establish your own
nest egg than someone who has millions.rules for property division and avoid potential
Âdisagreements in the event of a divorce. In most
You should consider having a prenup if you fall intostates, you can also make agreements about
any of the following categories:whether or not one or both of you will be entitled to
• You should consider having aalimony. Some states forbid or restrict agreements
prenup if you fall into any of the following categories:about alimony, however.
• You have assets such as aÂ
home, stock or retirement funds• Clarify responsibilities during the
• Own all or part of a businessmarriage. In addition to the reasons listed so far,
• You may be receiving anthere are countless other uses for a prenup,
inheritancedepending on your circumstances. Here are some
• You have children and/orexamples of other matters people include in their
grandchildren from a previous marriageprenups:
• One of you is much wealthierÂ
than the other• whether to file joint or
• One of you will be supportingseparate income tax returns or to allocate income
the other through collegeand tax deductions on separate tax returns
• You have loved ones who need• who will pay the household bills
to be taken care of, such as elderly parents-- and how
• You have or are pursuing a• whether to have joint bank
degree or license in a potentially lucrative professionaccounts and, if so, how to manage them
such as medicine• agreements about specific
• You could see a big increase inpurchases or projects, such as buying a house
income because your business is taking off, or thattogether or starting up a business
garage band you play in has just gotten a contract• how to handle credit card
with a big record company.charges -- for instance, whether you will use
Âdifferent cards for different types of purchases,
Hire Separate Attorneyswhat kinds of records you will keep, and how you will
It would be in your best interest to hire separatemake payments
prenuptial attorneys in Michigan. To help ensure an• agreements to set aside
enforceable agreement, both parties need their ownmoney for savings
lawyers. If both parties involved have the same• agreements for putting each
Michigan prenuptial lawyer, it could be construed as aother through college or professional school
conflict of interest. Many prenup agreements in• whether you will provide for a
Michigan have been thrown out because an aggrievedsurviving spouse -- for example, in your estate plan
spouse did not have legal representation. Theor with life insurance coverage, and
attorneys co-write the agreement with their clients'• how to settle any future
best interests in mind.disagreements -- for example, you might agree to
Âhire either a mediator or a private arbitrator.
What Can A Prenuptial Agreement Do For YouSigns of a Valid Prenup In Michigan
• Keep finances separate. EveryPerhaps the most important ingredient of a solid
state has laws designating certain kinds of assetsprenuptial agreement is honesty. Both parties must
accumulated during marriage as marital property orFULLY disclose their assets. If it turns out either
community property, even if these assets are held inperson has hidden something, a judge can toss out
the name of just one spouse. If a couple divorces, orthe contract.
when one spouse dies, the marital or communityÂ
property will be divided between them, either byAn ironclad agreement also must be signed well in
agreement or by a court. If you want to avoidadvance of the wedding. You can not present your
having some or all of your individual accumulationssignificant other with a prenup the day before the big
during marriage divided up by a court, you can do soday and think you can rush them into signing it
with a premarital agreement.without careful consideration.
ÂThe document should be signed as early before the
• Protect each other from debts.nuptials as possible to avoid the appearance of
Some of us bring debts, as well as assets, to acoercion, another key reason why some agreements
marriage. If there's no prenup, creditors canare rendered null and void.
sometimes turn to marital or community property toÂ
satisfy the debts of just one spouse. But if youIt is recommended to plan ahead and have the
want to make sure that saying "I do" does not meanprenup agreed upon at least one month before the
saying "I owe," you can use a prenup to limit yourwedding and preferably before the invitations have
liability for each other's debts.been sent out to make sure you are both on the
Âsame page. Nothing would be more embarrassing
• Provide for children from priorthan to cancel a wedding after the invitations have
marriages. A prenup is helpful (perhaps essential) ifwent out all because you could not agree on the
either of you has children from another relationshipprenuptial agreement.
and you want to make sure that your children inheritÂ
their share of your property. In a prenup, one orA valid prenup also is "fair" and will not leave one of
both spouses can give up the right to claim a sharethe parties destitute. No matter what state you're in,
of the other's property at death, perhaps inthe state will look for equity to make sure one
exchange for an agreed upon amount of property.spouse is not being taken advantage of.
• Keep property in the family. IfÂ
your property includes something you want to keepPrenups can include responsibilities that don't deal with
in your birth family, whether it be an heirloom or amoney, but you should avoid making demands that
share in a family business, you and your spouse canmight seem frivolous, such as requiring that your
agree that it will remain in your family, and you canspouse not gain weight, or that he or she quit
specify that item in your prenup. This can evensmoking and take out the garbage three times a
include property that you expect to receive in aweek. A judge could look askance upon terms that
future inheritance.are less serious than, say, stipulating what religion
Âyour children will observe if you and your betrothed
• Follow through by making yourare of different faiths.
estate plan. In addition to using your prenup to waive