A Prenup can benefit your marriage.
Many people think a prenup only benefits you in the event of a divorce. That is not true. In fact, a prenuptial agreement gives you certain benefits during the marriage.
1. A prenup can alleviate the financial arguments that are a leading cause of divorce.
Finances are one of the biggest stressors in a marriage, and one of the leading causes of divorce. The benefits a prenup provides to spouses is a requirement that they be open about their finances and prior to their marriage, and, if the spouses so choose, they keep finances separate during the marriage. This may not completely alleviate the financial stressors of a marriage, but it can help.
The prenup process requires a full disclosure of assets a debt. This could be critical. According to TDBank’s Love and Money 2021 survey, thirty-two percent (32%) of Americans are keeping financial secret from their partner. The survey found those secrets include secret purchases (40%), significant credit card debt (18%), and a secret bank account (13%). Certainly, such secrets are not a healthy start to a marriage, and the open conversations a prenup requires can help the marriage get off to a better beginning.
2. It shields both spouses from liability for each other’s acts and debts.
Did you know that if your spouse gets sued, the person suing them must sue you too? This can have major consequences. Consider the poor woman in Community Guardian Bank v. Hamlin, 182 Ariz. 627 (App. 1995). Unbeknownst to her, her husband spent $40,000.00 through a bank error. The bank sued both of them, and even though, they subsequently divorced, the bank chose to come after her for the debt, and there was nothing she could about it. In contrast, in Elia v. Pifer, 194 Ariz. 74, the trial court refused plaintiff’s request to add the defendant’s husband to the lawsuit because the parties had executed a prenuptial agreement; therefore, they did not hold their property as community property, and Husband was no longer liable for Wife’s debts.
3. It lets the couple decide how they will keep their property.
Why let the government decide how you hold your property? The community property laws are based on centuries-old Spanish common law. They work well for many people, but that does not mean they work well for you. A prenuptial agreement lets you customize how your property will be held during the marriage. You can choose to opt out of community property altogether. You can choose to follow community property law for some items and define how the property will be divided through the prenuptial agreement. You can opt out of it altogether.
4. It allows each spouse to hold their money separately—actually separately.
Often, when we are talking to someone about how their property will be divided in a divorce, they respond, we have always kept our property separate. That may be true, but technically, that still means that everything you own is community property. While you can maintain the separate nature of the accumulated property by agreement in the divorce, but if it is left up to a judge, a judge is likely to divide the property, regardless of how you held it. The better, more certain path is to opt out of community property laws by entering a prenuptial agreement.
5. Allows each spouse to protect their inheritances, including family heirlooms.
Frequently during marriage, one of the spouses receives an inheritance. They often wonder what they need to do to protect it in the event of a divorce. The best option is to do a prenuptial or postnuptial agreement. This does not completely remove doubt from the situation, but it makes it much more likely that the inheritance will remain yours in the event of the divorce.
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