Most people today regard a prenuptial agreement as a practical cautionary measure, much like an insurance policy. Any two people planning to get married can create a prenuptial agreement, but as a high-net-worth couple, you and your future spouse may get the most benefit from it.
For many years, there was a stigma surrounding prenuptial agreements. While this has lifted somewhat, many people still do not understand them and make mistakes with them as a result. Avoiding the following errors can help you produce a valuable and functioning document.
Waiting until the last minute
Entering into a prenuptial agreement with your future spouse can be an uncomfortable topic for discussion, but it is better to have it earlier rather than later. Otherwise, according to Insider, your spouse may be able to claim coercion, which could invalidate the agreement.
Thinking of the prenup only in terms of divorce
Divorce is not the only unfortunate event to which a prenup may apply. It can also relate to your estate plan by determining financial expectations for yourselves and, perhaps, for your children. Unlike divorce, death is inevitable, and either one or the other will eventually end your marriage.
Including unenforceable provisions
The court has the power to invalidate prenuptial agreements that a judge deems unreasonable or that favors one side unfairly. The judge has the power to either invalidate a specific portion of your agreement or dismiss the whole thing.
The purpose of a prenuptial agreement is not to set your marriage on the wrong footing. It is to allow you and your spouse to make a plan for a worst-case scenario that you hope will never occur.
