Prenuptial agreements are legal documents that outline how to divide assets and debts if a couple divorces.
Currently, around 15% of married and engaged couples have prenuptial agreements. This is a substantial increase from 2010 when the figure was only 3%, reports NPR. Despite growing acceptance, creating a prenuptial agreement still requires careful planning and forethought.
Preparation and research
You can start creating your prenuptial agreement by having an open conversation with your partner about your finances around six months before your wedding. Discuss your assets, debts and how you both envision handling money in the marriage. This conversation serves as the foundation for your prenuptial agreement.
Compile all necessary financial documents, including bank statements, real estate deeds and investment accounts. You and your partner must honestly disclose your finances for the agreement to be valid.
Developing your prenuptial agreement
Based on your initial conversation, begin drafting the agreement. Use clear and straightforward language to ensure that both of you understand the terms. Each party should take ample time to review the document. It is important to understand the implications before agreeing to it.
After reviewing the agreement, you might find areas that need revision. Make those changes and review the document again. You can continue this process until you and your partner can accept the terms. Once you are both comfortable with the agreement, you can sign the document in the presence of witnesses. Make sure to store it in a safe location that is accessible to both parties.
A well-crafted prenuptial agreement can help prevent stress and financial hardship for you and your partner in the long run.