For couples ending their marriage, it may be too late to consider what should have happened prior to the wedding. If there is no prenuptial agreement in place, the high asset divorce may turn into a long and drawn-out battle. Paying an attorney to draw up a prenuptial is usually far less expensive than paying one to represent you in a heated divorce case. Moreover, prenuptial agreements protect both parties in the event of a separation or death. A good prenuptial agreement is designed to protect both partners and provide some financial security in the face of a sudden life change.
A prenuptial agreement begins with a visit by the engaged couple to an attorney. The lawyer will take down all financial information and data about assets and then work with the couple to craft an agreement that will split present and future assets in the event of a divorce. Almost anything can be included in a prenuptial agreement, providing protection for items that have little worth but are of sentimental value. It is also possible for each party to have his or her own attorney to protect individual interests in drafting a prenuptial agreement.
If a couple separates but then reconciles, they may be able to create a postnuptial agreement. A postnuptial agreement serves much the same purpose as a prenuptial agreement but is far less common. This type of agreement outlines what will happen to the couple's assets if the reconciliation is not a success. Both prenuptial and postnuptial agreements are interpreted by divorce courts according to the laws of the state.
The decision to sign a prenuptial or postnuptial agreement should not be taken lightly. A family law attorney could explain your rights in the event of a divorce and potentially ensure that you are treated fairly in any marital agreement.
Source: Fox Business, "Why You Should Consider a Prenup," Andrea Murad, Feb. 4, 2013