Prenups are becoming more common among millennials — should you be signing one too?
Prenups are worth considering for various reasons, especially if one partner has more assets than the other, one or both partners have investments, or if you plan to have a family.
Signing a prenup requires thought and consideration — they should never be signed at the last minute before a wedding.
More millennials are signing prenups — should you, too?
Short for prenuptial agreement, prenups are no longer reserved for the rich and famous or those marrying multiple times; Americans marrying later in life with more assets to protect and millennials who fear divorce look to prenups as a source of protection.
A prenup manages expectations of what happens during a divorce and post-divorce. “Without a prenup, the laws of the state determine what will happen to your future should you and your spouse split,” Theresa Viera, family law attorney at Sodoma Law, previously told Business Insider.
“The largest advantage of a prenup is that the couple, not the court, decides what happens in the event of a divorce,” Viera said.
But it’s still not a decision to be taken lightly. Whether or not you get one depends on what you want to protect — if any of the following apply to you, you should consider getting a prenup.
One partner has more at stake than the other
If one spouse has more tangible value than the other, a prenup may be worth considering. This is especially true if you own real property or other high-value assets, or plan to acquire any during the marriage, Viera said.
“Usually, the things you owned before marriage will still be yours after the divorce,” Leanna Johannes, senior wealth strategist at PNC Wealth Management, told Business Insider. “There are exceptions. By planning ahead about the disposal of specific properties, and the titling of assets, time — and stress — can be saved,” she said.
Another thing to consider: If one partner earns significantly more income, especially if they want to pay little to no alimony. “If your take-home pay is far less than that of your spouse, it could be wise to make sure you’ll have support in the future,” Johannes said. “By agreeing ahead of time on the amount, duration and type of alimony, the prenup can help secure your financial future.”
But value isn’t limited to a bounty of assets or more money — it also counts when there’s a lack of value, like debt, whether it’s student loan debt or credit card debt.
As Johannes explains, if one partner has a high balance on their credit cards, you could find yourself responsible for debts you didn’t know existed. You may even be expected to help shoulder the debt load if your partner has credit card or other installment types of debt, she said.
One or both partners have investments or plan to invest
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Source:: Business Insider