Why Do You Need a Prenup Agreement?

A prenup agreement or a prenuptial agreement is a written agreement entered into by two people before they are married. The agreement usually contains a list of all the property owned by each person and the property rights of each of them after marriage. So why do a couple need to enter a prenup agreement? Take a look at the following to find out.

Communication

This is a kind of agreement that builds understanding about the property owned by each party in a relationship. When two people enter into the agreement, they know the property each other own, before and after the marriage. Talking about finances and property is one of the delicate areas in a relationship. However, this agreement will help to be honest and transparent about the property you own and your expectations.

Clarify Your Financial Rights

Once you have established a good understanding about your assets and debts, it helps you to have a clear idea about your financial rights. Whether the couple is with or without children, wealthy or not, having the ownership of your property will help you to know your rights to finances. It will further clarify what your financial responsibilities in the marriage are.

Protect Your Property

One of the benefits entering into a prenup agreement is that in case of a divorce, it helps you to settle and protect your property. In a divorce one of the most troubling areas is diving assets and debts. With an agreement like a prenup, you can easily separate what belongs to you and what goes to your spouse. This also allows you to protect belongings such as heirlooms.

Helpful When Passing Property to Children from Previous Marriages

This agreement also helps you in cases such as passing property to children from previous marriages. In case of your death this is where you can clarify it. If you are on the look for lawyers who can help you with a prenuptial agreement Melbourne will have several legal counsellors you can consult regarding the matter.

Avoid Property Battles

One of the most tiresome areas in a divorce is dividing property and avoiding property battles. A prenup agreement will help to define what qualifies as marital property, how you would divide it after divorce and whether a 50/50 divide or an unequal divide suits you the most. In other words, you and your spouse get to decide how your property will be handled in a divorce instead of the court splitting the property according to the state law.

Save Yourself from Debts

Another benefit of the agreement is that it splits the marital debts and liabilities in a divorce. In case your spouse has a large amount of credit card debts or other loan debts when they enter the marriage, a prenup will help to define them as a separate debt of your spouse.

An agreement like a prenup agreement helps you to settle your finances before the marriage so it will be utilised, divided and managed in a fair manner during the marriage or after it in case of a divorce. The agreement will save you from a lot of financial and legal issues as well.