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How a Prenuptial Agreement Can Protect Your Finances

Published July 1, 2020
While discussing financial matters may be the last thing on an engaged couples’ mind, creating a prenuptial agreement is a smart decision. It not only protects your individual assets in the event of a divorce—it also prompts you to start your marriage feeling open, honest, and connected.

While couples who are about to commit their lives to one another may be hesitant to think about the possibility of their union ending in divorce one day, there is still a not-insignificant chance that you will eventually decide to go your separate ways. Divorce rates still hover around 50 percent across the nation, so it’s smart to enter into your marriage having discussed what would happen in the event that you decide to walk away from your partnership. Let’s take a look at how a prenuptial agreement can help you protect your financial assets in the event of a divorce.

A Growing Trend

In recent years, more couples are creating a prenuptial agreement that allows them to openly discuss how their assets would be divided in the case of a divorce. A prenuptial agreement not only provides protection for both individuals in the partnership, but should the marriage end—it also encourages happy couples to engage in deep conversations about topics that they may have otherwise avoided, such as their financial histories, spending habits, debts, and other sensitive matters. Even if a prenuptial agreement is never needed, couples who go through the process of putting one in place report that they feel more connected and united when they enter into their marriage.

Facilitating Important Conversations

When you and your partner create a prenuptial agreement, you will be asked to share your financial goals and spending practices. These discussions can lead you to establish clear expectations and financial boundaries, which can give you a more solid foundation. Instead of realizing that your spouse has a hidden trove of student debt years into your marriage, you will share and become aware of each others’ assets and debts before you build your future together. This open and honest communication tends to bring soon-to-be spouses closer together, increasing the depth and strength of their partnership.

Establishing Clear Records

In addition to drafting a prenuptial agreement, it is a good idea to establish a clear record of your individual financial assets before you marry. If you end up pursuing a divorce, you will need to prove that a particular asset, such as a bank account or brokerage account, truly belongs to you. So, make sure you start collecting and organizing any documents that prove that this asset is in your name. You should also discuss how you and your spouse would like to handle your banking as a married couple—will you keep separate accounts? Or will you commingle your funds? Even though this topic may be the last thing you want to discuss (especially since planning your wedding is already exciting and time-consuming), it is still highly recommended that you carve out some time to have these important discussions. Your future selves will be grateful!

 

To learn more about how a prenuptial agreement could work for you, contact Lee Tyler Family Law, P.C. today at (503) 233-8868 to schedule an appointment with a dedicated Portland divorce and family law attorney.

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