How to Protect Your Assets With a Prenup

A prenuptial agreement is a contract signed by two people before marriage to ensure that all assets and liabilities are distributed fairly in case of divorce or death. A prenup is the most important legal tool at your disposal to protect assets such as family businesses, real estate, jewelry, stocks and bonds, trust funds and inheritances.

Instructions

Difficulty: Moderate

Use a Prenup to Ensure Your Future Financial Stability

1. Take an inventory of all your assets before you approach a lawyer to draft a prenuptial agreement. This should include all of your property and holdings, all of your investments, any trust funds or future inheritances and any items that have a monetary value. Full disclosure is key, since a prenup can only protect the items you have specifically listed.
2. Discuss the prenup with the person whom you wish to marry. Talk about the agreement in a comfortable, relaxed and neutral atmosphere and emphasize that the agreement is designed to protect the rights of both of you and not to favor one person or the other. Never wait until the last minute to bring up a prenuptial agreement, when all of the wedding plans have been made, since a prenup signed under duress may not hold up in court.
3. Choose a lawyer with years of demonstrated experience in crafting prenuptial agreements that are fair, balanced and legally binding. In fact, you should ask your loved one to hire his own lawyer to review the prenup, since having two independent attorneys approve the document will make it more iron-clad in court.
4. Stick to specific monetary amounts when drafting the prenup and avoid placing conditions on the other party that are not related to assets, debts or other financial concerns. A prenup cannot address such issues as child support and custody, infidelity, alimony payments and other personal concerns.
5. Ensure that the prenup protects any businesses or ventures that may affect others, such as business partners and family members. Many businesses have become insolvent when a single partner or major stockholder has undergone a particularly tough divorce.
6. Designate that the prenup protect all future sources of income, such as inheritances, investments or trust funds, even if they are not currently generating any income for you.

Tips & Warnings

• In order for a prenuptial agreement to be legally binding, it must be executed in front of two witnesses, with the authorization of a notary public.