A prenuptial (prenup) agreement allows soon-to-be-married couples to determine what will happen to their property should they get a divorce. Further, it encourages honest conversations about money from the word go and shields each party from the other’s debts.
Couples should be careful when writing a prenup, as mistakes can invalidate the document and, in turn, not offer the intended benefits. The following are three mistakes to avoid:
1. Not disclosing assets and debts
It can be uncomfortable to talk openly about finances with someone you are about to spend the rest of your life with. But lying or failing to disclose assets/debts may disadvantage both of you.
For starters, the court may invalidate the agreement. Additionally, the party that fails to disclose crucial information may be in legal trouble. A marriage may also be in jeopardy if a party discovers they were lied to even before the union began.
2. Not being specific
You should be specific about each matter you cover in your agreement. For example, you should be clear about alimony – state the type of spousal support you/your partner would wish to pay and the level of support you can provide. You should also be detailed about the approach you will use in the division of assets and debts.
Being specific can save you from misunderstandings in the future, which usually defeats the purpose of having a prenup.
3. Not discussing how you will update the agreement
As life changes, you and your soon-to-be spouse will face circumstances that will require you to update your prenup. These can include changes in financial status or receiving inheritances.
Failing to plan how you will review and update your prenup or forgetting to make necessary changes altogether can negatively impact you.
Mistakes can invalidate your prenup. You should get legal help when drafting one to have an effective agreement.