Couples use a prenuptial agreement to add clarity to who brings what assets into a marriage. From owning property such as a home, business or vehicles to financial assets such as an income property, deferred compensation or retirement accounts, it is wise to ensure these assets are protected. If divorce becomes a reality, the prenuptial agreement can help the property division process run smoothly.
The division of physical assets and debt responsibility can become a major challenge for a marriage that includes complex assets. It is not uncommon for a divorced individual to enter subsequent marriages. For these new marriages, it is important to remember to draft a new prenuptial agreement. Two crucial factors that must be addressed can include:
- Protecting your retirement funds: It is not uncommon for an individual to build retirement funds over several decades, numerous jobs and different marriages. In many cases, retirement accounts are considered marital property to be equitably divided when the marriage ends. It is wise to clarify which assets you are bringing into the marriage and protect your various funds after divorce.
- Protecting your adult children: An important consideration in the ownership of assets that are brought into the marriage is ultimately protecting the inheritance of your adult children. The marital contract ensures property that is intended as an inheritance remains that way should divorce become a reality.
While divorce isn’t a long-term planned event, it is wise to devote significant effort into clarifying your assets and debts. Protecting your retirement accounts and the inheritance of your children is a priority when you are entering into a second or subsequent marriage.