A prenuptial agreement allows an engaged couple to execute a contract to determine what happens if the marriage ends prematurely. According to Forbes, a marriage can end prematurely either through a divorce or through the death of one of the parties. Typically, a prenuptial becomes operational to protect non-marital property as well as growth on that non-marital property during the marriage. The law might otherwise characterize that growth as marital property through the process of being married and having the value increase.
Prenuptial agreements can also address the issue of alimony, the question of jurisdiction of a divorce, and the date that property will be valued. Quite often, prenuptial agreements will address cash flow and talk about the engaged couple’s earnings. The deal will specify if both spouses will have individual bank accounts and that anything they purchased from that account be not marital. According to Divorce Magazine, the prenuptial agreement may direct that the couples have a joint account where they equally contribute value or dollars and purchase items that they deem to be marital property.
The common types of prenuptial agreements include families who own family businesses or come into a marriage with a large number of investments. Another type includes couples who are in a second marriage, and they want to try to protect and preserve their estate for the sake of their older children. The law on the issue of prenuptial agreements is relatively straightforward. Parties are mostly free to contract freely. As they will, however, two elements must be satisfied. First and foremost, they must execute the document in a procedurally fair manner. The second element involves substantive fairness. The document must be fair on its face and anticipate to be fair if and when there should be divorce as a part of the marriage.