It is important to protect yourself financially before entering a marriage. There are a number of ways to do this, with a valid prenuptial agreement being one of the more effective methods.
Prenuptial agreements set out how property, debts, and assets are to be divided in the event of a divorce. Utilizing these legal tools can actually set a couple up for a more successful relationship. The reason for this is that financial disputes are among the leading causes of separations. Knowing where you stand financially before a marriage commences can encourage open communication as well as provide a sense of stability.
Outlined below are some of the key factors that should be addressed in a prenuptial agreement.
Limiting your debt liability
Without a valid prenuptial agreement in place, you may be liable for the debts of your spouse. By utilizing legal instruments, you can ensure that debt incurred by your spouse before marriage remains their responsibility. Disputes over debts often make the divorce procedure highly contentious, and such issues can also take a significant amount of time to resolve.
Where each partner stands
A prenuptial agreement is also an extremely effective way of letting each spouse know where they stand. For instance, you will be able to set out how much should be contributed to savings accounts, whose responsibility it is to manage household expenses, and who has control over bank accounts. Furthermore, prenuptial agreements can determine how financial disputes are to be resolved should they arise.
Estate planning options
Along with wills, trusts, and other estate planning tools, prenuptial agreements can play an important role in the distribution of your assets should you become incapacitated. For instance, you may be able to protect children from a previous marriage, ensuring that accidental disinheritance does not take place.
Prenuptial agreements can be in the best interests of both parties. As a spouse in Michigan, you should know that you have legal protections.