When you’re about to get married, the last thing you want to think about is the possibility that your marriage might not work out. Still, you’ve read the statistics and you know that there’s a good chance that your marriage could end in divorce. If that happens, you’ll face emotional turmoil and, quite possibly, an enormous blow to your finances.
A prenuptial agreement can protect you from the worst of that financial hit.
Property division
A prenuptial agreement, also known as a premarital agreement, is a contract you sign with your soon-to-be spouse that outlines both parties’ obligations should the marriage end in divorce. The most common purpose for a prenuptial agreement is to decide matters related to the division of property.
When a couple divorces in Tennessee, they must divide their marital property according to state law. This involves first determining what is separate property and what is marital property, and then dividing the marital property in a way that meets guidelines of fairness.
Reasons to have a prenuptial agreement
Property division is often a difficult and time-consuming process, but a prenuptial agreement can decide many of property division issues in advance.
For example, if you own a small business, your prenuptial agreement could specify that the business will remain your separate property should you later divorce. Otherwise, a court could find that your spouse acquired a property interest in the business during the marriage. This is common among business-owners — particularly after a marriage of many years — and it can be enormously difficult to resolve in divorce.
Besides business ownership, some other situations in which a prenuptial agreement could be useful include:
- If one of you is putting the other through school
- If one or both of you have retirement accounts
- If one or both of you have life insurance
- If one or both of you have children from previous relationships
Knowing where you stand
Many people are uncomfortable with the idea of a prenuptial agreement because they think it is unromantic. Perhaps they think that signing such a contract would suggest that they are not full committed to the marriage.
But there’s another way to look at it.
When you sign a prenuptial agreement, you practice transparency with your partner. You disclose all your property and make sure the other person knows your expectations about your property, your future and your marriage.
In this way, drafting a prenuptial agreement can actually strengthen a relationship.
Like marriage, a prenuptial agreement is something you should walk into with open eyes. If you’re considering a prenuptial agreement, speak to an experienced professional about your options.