When you start making plans to get married, getting a prenuptial agreement may not even cross your mind. Although many people associate these agreements with famous, wealthy couples, you don’t have to be extremely affluent to benefit from them. By using this legal document to make decisions before marriage, couples can set out their expectations and plan for the future together. Here is some information to consider to answer the question: Do I need a prenuptial agreement?
What is a Prenuptial Agreement?
In Wisconsin, a prenuptial agreement (also known as a premarital or marital property agreement), is a binding arrangement between two people that sets out how they want to manage particular issues and divide their assets in the event of divorce.
The document serves as a contract and may have different sections that decide matters such as: which partner owns specific pieces of property; how assets will be split in the event of divorce; how spousal support will work, and estate planning terms. Parties may also agree to use mediation or arbitration in the event of divorce.
Why You May Need a Prenuptial Agreement
Separate Property
At one time it was common for couples to get married right after graduating high school or college. However, times have changed, and many people are putting off marriage until after their careers are in place.
Depending on your situation, you may already own a home, have considerable retirement accounts and savings, or possess other valuable assets when you decide to marry. What you have coming into the marriage may feel like your separate property, but once you get married it becomes “marital” in the absence of a prenuptial agreement.
By including and identifying separate assets in your prenuptial agreement, you can remove any possible ambiguity about shared ownership if you’d rather keep your pre-marital property individual to you.
Dependent Loved Ones
Some separate properties may already have been set aside to provide for dependent loved ones. For instance, if you own family land that you plan to sell one day to provide for your sibling with special needs, identifying the property in your agreement can help protect the asset.
Additionally, if you have aging parents, you may need to safeguard their property and funds to provide for their future care.
Second Marriage
If you are getting remarried and have children from your previous relationship, creating a prenuptial agreement can be crucial to protecting the funds and assets intended for their future. Even if you and your spouse remain married, without planning, your children may not end up inheriting from you as you intended.
One way to ensure that your children are provided for is to create a provision in the prenuptial agreement that establishes your children’s assets, and the actions your spouse should take regarding estate planning. Even if you do not intend to provide for children, having a prenuptial agreement is an important way to make sure your interests and assets are protected.
Since Wisconsin is a community property state, if you die, by law your new spouse inherits at least half of your property upon your death, even if you meant for something else to happen. A prenuptial agreement can help address that.
Business Interest or Family Wealth
If you own a business or are part of a family enterprise, the decisions you make affect others. Your employees, business partners, and relatives could all be impacted by the financial devastation of a divorce.
Since Wisconsin is a community property state, everything you acquire or earn during the marriage belongs equally to each spouse. When there are multiple interests in an asset or business, dividing the community property can get complicated for everyone.
By preparing a premarital agreement that clearly establishes how marital interests in your jointly-owned assets will be assigned during divorce, you can help avoid significant disputes and conflicts down the road.
Karyn Youso of First Look Family Law is a family law attorney with experience helping clients draft Wisconsin marital property agreements. Come in and let us take a “first look” at your circumstances and get the information you need to make informed decisions.
