Marriage is the union of persons as partners in a personal relationship. It binds two people into a relationship founded on love. They agree to take care of each other and fulfill essential marital obligations.
Marriage not only binds the parties into obligations and responsibilities, but it also binds and unionizes their properties into marriage. This is when the prenuptial agreement will play a vital role in protecting and governing marital properties. A prenuptial agreement is a settlement on how their properties will be owned and administered.
When the parties enter into a prenuptial agreement, they will create a contract also known as a marriage settlement. This contract will govern the relations of their properties, whether they will be separate and exclusive properties or conjugal properties. It is usually entered into before the celebration of the marriage ceremony and is usually done under the guidance of lawyers who are experts in drafting or creating a prenuptial agreement.
Before the parties can enter into a prenuptial agreement, the following pros and cons should be taken into consideration:
Pros of a Prenuptial Agreement
Protect the wealth
Protecting the wealth of the parties does not only mean protecting the properties of one spouse from another spouse, but it also aims at protecting the future properties or conjugal properties that may be acquired during the marriage.
Protecting wealth tends to promote transparency in the assets and financial interests of the spouses and helps to account for any properties that may be acquired and come into possession of the future spouses.
In protecting their wealth, the future spouses may consider what properties will remain as exclusive properties of each spouse and what properties will become part of the conjugal properties owned by both spouses. The separation or union of properties will protect the interests of either spouse in the long run.
Manage finances and obligations
Future spouses may also take advantage of managing their finances properly through a prenuptial agreement to ensure that all obligations will be paid evenly and proportionately by each spouse depending on their capacity to pay. This will ensure that each spouse will share in the costs and obligations to be incurred in the future.
This will also help the spouses’ plan and budget according to their properties and sources of income. Any debts existing or to be obtained may also be tackled in a prenuptial agreement.
Ease the legal process in case of separation or divorce
Entering into a prenuptial agreement provides an easy process for the future spouses in case of separation or divorce. The prenuptial agreement helps to settle the separation of properties easily. It provides clearer guidelines on how the properties will be distributed to the person entitled to them and speeds up the legal process of separation or divorce.
The properties may also be readily available when needed because the ownership and distribution of properties are already pre-determined in the prenuptial agreement. This can also reduce the cost of divorce and legal separation of properties.
Protects inheritance of the heirs
The inheritance of the heirs from a current or previous marriage may also be protected by a settlement of their property shares in a prenuptial agreement. Conflicts may be avoided through the determination of properties to be inherited by the heirs and the amount to be inherited depending on the inheritance law applicable.
The parties may also agree on what laws will govern the inheritance of their heirs and how they shall be applied to their properties.
Cons of a Prenuptial Agreement
Provokes the sense of lack of trust
A prenuptial agreement may sometimes make it appear that the future spouses cannot trust each other for the management and ownership of properties because they tend to pre-determine what will happen to their future properties and up to what extent the spouses will own or manage the properties.
Sometimes, one spouse whose property is of a higher value than that of the other spouse tends to make it appear that he or she does not want to entrust the ownership of his or her properties to the other spouse or they do not want to give up or share their properties with the other spouse.
Low-income earner spouse may tend to agree to disadvantageous terms and conditions
The spouse whose income is lesser than the other will tend to follow the terms and conditions imposed by the wealthier spouse. They may tend to enter into a settlement that the spouse earning less is forced to accept because of his or her love for the other.
These advantageous terms and conditions will tend to control the decisions and actions of the other spouse in the future and will grant the dominant spouse the power to control the marriage or the other spouse.
Shake the stability of marriage
The prenuptial agreement will also tend to draw uncertainties into a marriage. It makes it appear that the marriage will end at some point in time. It creates doubt in the spouses about whether or not their relationship will last or if it will inevitably end up in the distribution and separation of properties as presented in the prenuptial agreement. Moreover, this agreement may tend to ruin the romance of the spouses because all their assets’ distribution and ownership are already determined.
The bonding of spouses in terms of financial development and planning may be affected by the predetermined distribution of properties. One spouse may feel a lack of desire to enhance or develop financial literacy because he or she may think that such a course of action will not in any way contribute to the success of their financial well-being. After all, the agreement already dictates how assets will be divided.
Need to consider certain laws to be effective and enforceable
The effectiveness and enforceability of prenuptial agreements will depend on the applicable prenuptial laws. Some countries limit the terms and conditions of the prenuptial agreement because some prenuptial laws prohibit certain provisions to be embodied in the agreement. Thus, the prenuptial agreement may not always embody all the terms agreed upon by the parties.
The need to consult and seek legal advice from prenuptial agreement lawyers must always be observed to ensure that the prenuptial agreement will not end up just being a mere scrap of paper.