The rate of divorce has been increasing during recent decades. Unfortunately, divorce is often messy and unpredictable. It is for this reason that couples create a prenuptial agreement before entering marriage.
A prime consideration when creating a prenuptial agreement concerns division of property in the event a divorce occurs. The property division process during divorce can be particularly complex.
Considerations when creating a prenuptial agreement
While we think of prenuptial agreements only being for wealthy individuals, a recent Forbes article points out that practically anyone going through a divorce has significant assets they wish to protect. Assets at stake when it comes to property division can include 401(k)s, pensions accounts and stock portfolios, real estate holdings, and even a family business.
Any division of such holdings could also lead to tax consequences adversely impacting one or both spouses. A well-prepared prenuptial agreement can arrange for property division to take place in such a way that minimizes taxes and expenses.
When going through the process of preparing a prenuptial agreement, each spouse will disclose the nature of their assets to each other. There is a tremendous advantage in making such disclosures before the marriage takes place rather than at the time of divorce. At the time of divorce, couples are not always cooperative or forthcoming about providing information. In Florida courts, the property division process is often extremely contentious.
It is certainly true that the amount of assets couples possess will change throughout a marriage. However, in a prenuptial agreement, couples can agree to make periodic or annual disclosures of assets and debts. Such an arrangement brings a great deal of transparency to any asset division process should a divorce take place.
Obviously, couples want a premarital agreement prepared correctly. For this reason, having legal guidance when creating a prenuptial or postnuptial agreement is invaluable. Resolving property division questions and other issues in advance will help reduce the amount of stress that accompanies divorce. This would be a victory for the entire family.