Top situations when a prenuptial agreement could be crucial

Popping the question about creating a prenuptial agreement might be a turn off for many couples in California. However, the legal practicalities of executing such a document could outweigh its unromantic nature. A prenuptial agreement forms a contract that guides the parties if the union dissolves because of divorce, separation, annulment or even death. The document explains how to handle the division of marital property, inherited assets, child support and spousal support.

Financial planners recommend that a partner who possesses considerably more assets or expects to inherit wealth should create a prenuptial contract. The agreement could grant the less affluent spouse a fair settlement while preventing the person from getting a large portion of the other spouse’s wealth. Someone who owns a business may also want to establish similar protections so that an ex-spouse does not acquire a substantial share in the business.

Debts also trigger the need for a prenuptial agreement. A person could use this legal tool to prevent becoming liable for all or some of the other spouse’s debt load.

The document could also outline how to support children and explain what assets the children have a right to inherit. This step could be especially important for people on their second or third marriages who have children from other relationships.

With a prenuptial agreement in place, both parties could be insulated from arbitrary decisions imposed by a family court during a divorce. A person could ask an attorney to cite the agreement during divorce negotiations. Ideally, the resulting settlement would adhere to the previously agreed upon terms, and the person could avoid a costly court battle. Litigation, however, could become necessary if either party challenges the agreement. An attorney could then take actions to defend the person’s claims in court.