Summer means wedding season. If 2015 is any indication, more than 17,000 Wisconsin couples will wed between now and September. While the majority (74 percent) of those will be first-time marriages, the fact that 26 percent are repeats to the altar is a reminder that not all couples live happily ever after.
It makes sense to assume you’ll be together for life. That’s one of the reasons people marry. But the umbrella rule—the notion that it won’t rain if you have an umbrella—may also apply to marriage, a prenup being the umbrella. Besides, a prenup can be a great planning tool, not just protecting you while you’re married but also facilitating important financial understanding before you say I do.
These four questions can help you determine whether a prenup makes sense for you and your partner.
#1 Are you bringing assets to the marriage? If one partner is bringing significantly more assets to the marriage than the other, it may make sense to keep them separate from the marital assets. This would apply to real estate, investments, inheritance, even compensation for personal injuries. A prenuptial agreement can also help couples determine how to avoid commingling assets down the road and undoing their original intention. For example, if one partner brings to the marriage a house inherited from a parent and the other spouse contributes insurance payments and upkeep for the house, it may easily lose its nonmarital status.
#2 Does one partner have disproportionate debt? Prenuptial agreements aren’t just about wealth protection, they’re also about debt protection. A prenuptial agreement can separate debt as well as assets from marital property, including debt acquired both before and during the marriage. That can be especially helpful when one partner has a bad credit history or tends to overdo it on the credit cards.
#3 Do you have children from a prior relationships. If you have children from a prior relationship and wish for them to receive your assets upon death, the combination of a prenuptial agreement and will can ensure that happens. Without that specifically stated intent, your children will split your assets 50-50 with your surviving spouse.
#4 Do you own a business? While a buy-sell, operating or other agreement can restrict a spouse from owning a portion of the business, a better way to avoid ownership is to spell it out in a prenuptial agreement. Keep in mind, this doesn’t apply just to businesses that are thriving but also to those that are laden with financial troubles.
Once you marry, co-ownership of some assets is unavoidable. If you wish to keep any debt or assets separate, a prenup is the way to do it.
By Tony Gingrasso, Divorce Attorney La Crosse WI. For a divorce attorney in La Crosse WI, call him at 608-784-5678.