Prenuptial agreements are contracts between two people about to be married. The contract protects the assets of one or both parties. While prenuptial agreements are commonly heard of among the rich, the contracts can be created for anyone who has assets they feel the need to protect in the event of divorce or their death. Having a prenuptial agreement provides the user with peace of mind regarding their valuables.
Significance - Prenuptial agreements are used to protect a person's assets in case of a failed marriage. Whereas divorce law covers certain aspects of the personal finances of a married couple, prenuptial agreements are specific to certain assets of a person.
Who Uses a Prenuptial Agreement - Some examples of when a prenuptial agreement may be created are when a person owns a business or other asset, to protect an inheritance or when a person has loved ones who may require care in the future. If a person views his or her assets as valuable, that person may be inclined to secure those assets by having his or her partner sign a prenuptial agreement.
Misconceptions - Misconceptions can occur when one broaches the subject of a prenuptial agreement. Just because a prenuptial is created does not necessarily mean that the parties involved intend to divorce; rather it is used as a way to protect certain assets that a person may have had before the marriage. While a prenuptial agreement may be created to protect one party's assets, it cannot take advantage of the other party. A judge may throw out a prenuptial agreement if it is viewed in such a way that one party is left with little or nothing. While a prenuptial agreement can be written and signed by two people alone, it is best to have the prenuptial created by an attorney to ensure that there are no challenges to the contract.
Benefits - There are several benefits to having a prenuptial agreement. The contract provides peace of mind to the couple getting married. In the event of death or divorce, the assets are protected as described within the prenuptial agreement, and often the agreements are iron-clad, meaning that they can't be successfully challenged. Prenuptial agreements can be updated as often as needed, so if the financial situation changes, the agreements can be changed to reflect the situation--this is true even after the marriage has taken place.