What Can be Included in a Prenuptial Agreement?
Prenuptial agreements have long been seen as a way for one spouse to protect their wealth from division of assets in the event of a divorce. However, modern couples are taking a different view of what prenuptial agreements can do and using them for the potential benefit of both parties. More and more, prenups are coming to be seen as a positive opportunity to curtail the difficulties of divorce, rather than a weapon designed to hoard wealth.
Still, before a couple enters into a prenuptial agreement, it’s best that they understand not only the ramifications of this legal maneuver, but also what they can legally include in a prenup. Like wills and trusts, these legal contracts are intended for specific usage, and certain things cannot be included. What can you reasonably expect your prenup to cover? Here’s what you need to know going in.
What Can be Included?
Prenuptial agreements are intended to help couples make arrangements for financial concerns in the event of divorce, although they cannot include any stipulations that are deemed to encourage divorce. As a result, they are most often used to determine issues like how financial accounts, property, and perhaps even business interests will be divided should a couple decide to call it quits.
Couples can decide whether or not they’ll each retain their own retirement accounts following divorce or if they will be shared. They can create plans for alimony (amount and duration), for passing along inheritance to children from previous relationships, and for creating wills and trusts that ensure certain plans are carried out.
In some cases, prenuptial agreements can also cover certain behaviors during the marriage, even if the parties never divorce. For example, prenups can be used to dictate how spouses manage assets during the course of the marriage. They can also make a plan for what will happen if one spouse dies. If there are children from previous marriages involved, for example, parents may want to protect inheritance in the event of death, and a prenup is designed for this type of financial arrangement.
What Can’t be Included?
Prenuptial agreements are designed primarily to help spouses manage financial arrangements during a marriage and following divorce. They are not designed to cover issues like child custody in the event of divorce. This must be determined by parents at the time of divorce or by the family court system, if parents cannot reach an amicable agreement.
The same goes for child support payments. While parents can make determinations about inherited wealth prior to a potential divorce situation, the Michigan Child Support Formula is used to calculate child support payments based on a number of factors that often cannot be predetermined at the time of marriage (and the formation of the prenup).
Making a Prenup Enforceable
It’s important to remember that prenuptial agreements are legal contracts and they must be created properly in order to be enforceable. This means they must be entered into willingly by both parties, not under fraud or duress, for example. They must be fair, equitable, and reasonable, so if circumstances change significantly during the course of the marriage, the prenup may become unenforceable.
If you’re interested in creating a mutually beneficial prenuptial agreement to protect all parties entering into a new marriage/family situation, contact the experts at The Gucciardo Law Firm at 248-723-5190 now to get started.
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