In New Jersey, a prenuptial agreement, or prenup, is a contract that two people sign before they get married. It is designed to shield the assets of one or both parties in the event of a future divorce, and it is most useful in cases where one or both parties is a high net worth individual.
Key facts about prenups
Prenups can be emotionally straining to discuss, because nobody wants to enter a marriage and think about divorce. However, about half of all marriages end in divorce, so it is worth preparing for the possibility. Today, many people who marry have been married before. That experience can show them what divorce can mean and inspire them to consider a prenup for financial security. This is especially true if they have children from a previous marriage. Prenups can cover those complexities as well as other issues, such as the possibility of one or both spouses inheriting wealth. Prenups can even cover debt.
Using a prenup
A prenuptial agreement is most commonly used in cases where one spouse will be significantly wealthier than the other when they get married. If done correctly, however, the prenup can also cover the other spouse if they happen to build wealth during the marriage as well. Prenups are especially important when business ownership is involved. Trying to break up a family business as part of a divorce proceeding can be extremely expensive and can damage or destroy the business’s ability to operate.
While there are many reasons to write and sign a prenup, they are all designed to insure the couple against the potential financial outcomes of a divorce.