With divorce rates hovering at about 50%, many California residents who are getting ready to marry might consider signing a prenup. There are many reasons why, even if it seems like a non-romantic decision.
An honest discussion about finances
Financial differences can often become a factor in a divorce, but when couples decide to draft a prenup, they must address them. This process, which will often include disagreements, negotiations and finally understanding can help couples find their middle ground when it comes to their finances.
Reasons why couples should sign a prenup
The reasons for signing a prenup range from protecting individual interests to saving money in case the marriage does not work out. Some of the reasons why couples should sign a prenup include:
- Establishing separate and marital property
- Protecting financial interests of children from a previous marriage
- Defining business interests and limiting a spouse’s access to the business
- Separating individual debt from marital debt
- Establishing the financial responsibilities of each spouse in the marriage
- Creating a financial safety net for spouses who will become the stay-at-home parent
Things to know about prenups
For prenups to be recognized, both spouses must have freely signed them, with all information disclosed ahead of time. These agreements cannot address questions of child custody and support as courts understand that there are strong standards in each state for how these questions will be dealt with. Pets, however, can be addressed in prenups, even in California where they are increasingly legally treated as a couple’s children for custody matters.
Prenups are not necessarily just about existing money. While there are usually provisions to protect a wealthier spouse’s interests if the marriage fails, prenups have often protected the other spouse’s interests as the roles have been reversed during the marriage.