With a solid prenuptial agreement, you and your spouse may avoid the tough conflicts that can drag out a divorce. A prenup is particularly helpful for resolving who gets what when a marriage ends. There are many ways you can address what will happen to your property.
Kiplinger explains how you can use a prenup to clear up various property questions. You can not only address which property should remain yours, but you can use the agreement to promote fairness for your spouse so that a divorce judge is willing to uphold your agreement.
Compensating a spouse
You might dream of going to a prestigious university or a medical school. If your spouse financially supports your educational and professional efforts, you may use your prenup to come up with a formula to compensate your spouse for his or her contributions. It may prevent a judge from deciding that your spouse deserves a financial share of your future professional earnings.
Sorting out debt
You and possibly your spouse may bring some debt to the marriage. A prenup is a good time to designate those debts as separate property. If not, there is a chance the debt could become marital property and you may end up on the hook for an amount your spouse owes to creditors like a bank or a credit card company.
Protecting property you do not have
Prenups do not only address the property you and your spouse currently own. You can also dictate what will happen to assets you come into during your marriage. If you anticipate a large inheritance, your prenup can designate that inheritance as yours alone. You can also designate money that you receive from royalties from a work like a book, a video, or a song.
Waiving estate rights
Making a prenuptial agreement also gives you the opportunity to protect the inheritance of your children. If you have children from a previous marriage and you die, your current spouse will likely reap a portion of your estate. With a prenup, your spouse may waive those inheritance rights so your children will receive what you want them to have after your death.