The importance of prenuptial agreements cannot be understated in today’s society. Typically, prenuptial agreements are used to establish an allowance in a marriage contract or to determine which party is legally defined as the head of the household.
However, prenuptial agreements are not limited to these uses. Here, we will discuss some other facts and circumstances that pertain to this important document. First, it must be noted that in many instances, prenuptial agreements are utilized to avoid or reduce estate taxes, as explained in this post.
Estate taxes are calculated by taking into account the fair market value of the assets of the deceased, minus the amount of any liabilities (liabilities include mortgages, judgments, and so on). The idea is to lessen the liability of the decedent and to ensure that his or her family is financially provided for after his or her death.
As such, the agreement may protect assets from creditors and/or government agencies, reducing the amount of taxes that accrue. However, one should keep in mind that, although these agreements often reduce or eliminate the estate tax, they also may increase taxable income.
Also, in some instances, a prenuptial agreement may be utilized as a tool to save time during the divorce process. For example, some jurisdictions (such as the U.S.) require that a spouse acquire separate property (as opposed to marital property) before the divorce can occur.
In this case, if the spouse seeking the divorce had obtained a written prenup agreement, one could potentially prevent the division of assets and reduce the amount of time the process would take. While not every state allows separate property in the case of divorce, most do.
Furthermore, prenuptial agreements can also serve to resolve any marital debt issues (child support, alimony, etc.). A prenup agreement may also prevent one party from disinheriting the other. In simple terms, where one party has an interest in protecting his or her assets and/or property during the marriage, such an agreement may provide protection.
For example, if you are a homeowner, then a prenup agreement may be able to prevent your spouse from gaining access to your home during a divorce. Such an agreement may also prevent a spouse from selling your home during a divorce, which is beneficial to him or her as well.
Furthermore, such agreements may prevent one party from being forced to sell or transfer assets during a divorce, a situation that can result in you losing significant assets. Another example of the value of a prenuptial agreement comes in the form of the “deposition” clause.
As you likely have already guessed, a deposition is a legal examination were a witness to a lawsuit Testa Divestiture proceeding is compelled to testify under oath. Such depositions can provide important information about the character of both spouses and can help to determine which party is more likely to file for divorce, as well as how likely the other spouse is to try to force a trial.
In family law, such agreements are particularly helpful when one spouse is fearful of being questioned by the other spouse’s attorney, as is often the case in divorce proceedings. The importance of prenuptial agreements comes into play after the parties to a marriage have reached their majority.
In most instances, marriage tends to bring two people together with very little difference between them. This can be good at the beginning of a marriage, but as time goes by, two people tend to begin to drift apart. In some cases, this can even lead to the marriage breaking down, especially if one spouse feels that they have been treated unfairly by their partner.
In this case, a prenup agreement would ensure that any assets a couple had been distributed fairly, as well as providing protection against creditors seeking to collect on a debt. Another situation where prenuptial agreements are helpful arises in the event of the death of one spouse.
If the couple had planned for their death beforehand, then such an agreement could have been used to ensure that any assets were transferred to the surviving spouse. However, the chances of that happening are unlikely to be good, as few couples expect their death to happen so soon after marriage.
Any assets left behind will most likely end up in court, as the surviving spouse may be asking for a divorce. In this case, a prenup agreement is almost always agreed upon by both parties. Even if no assets are involved, it’s still better to agree on an agreement now rather than have to worry about it later.
In the event of a separation or divorce, both spouses can agree upon an agreement regarding properties and obligations. Unlike prenuptial agreements, postnuptial agreements do not need to be drawn up in court.
In fact, the court system may even allow for one party to post a prenup before getting married, provided that such a document is not forged or carried out in bad taste.
Both spouses then get to decide how property will be divided, with each party getting four weeks, after the expiry of the period mentioned in the agreement, to decide whether to carry out the plan or discontinue the process.
