When planning for marriage, you are likely to think about the future of the relationship, not its demise. Still, prenuptial agreements can help protect your assets if the marriage ends in divorce.
A prenup outlines how couples split their assets and debts if they separate or divorce. This legal document can cover various financial aspects, including your professional practice.
Protecting your hard-earned assets
There are certain limitations on what couples may include in their prenuptial agreement. For those with business or professional practice, a well-crafted prenup can help:
- Keep your practice separate from marital assets
- Limit your spouse’s claim on business growth during marriage
- Protect future income from your practice
- Preserve your professional licenses and certifications
Suppose you are a doctor with a medical practice. Without a prenup, your spouse could claim a portion of your practice in a divorce. This situation might force you to sell or liquidate your business, disrupting your professional life and income.
With a prenup, you can define your medical practice as a separate property. This can ensure it remains yours regardless of what happens in your personal life.
Another example is if you are an entrepreneur with a growing business and want to protect it from potential creditors. A prenup can help establish guidelines for spousal support so that alimony payments will not drain your business.
Do not attempt to create a prenup on your own
It is essential to remember that creating a prenup or even considering making one does not mean you expect your marriage to fail. Instead, it shows you are planning responsibly for all possibilities. It can strengthen your relationship by promoting open communication about finances.
Prenuptial agreements should reflect your unique situation and Michigan’s specific laws. The law requires prenups to be in writing, signed by both parties, entered voluntarily and accompanied by full disclosure of assets and liabilities. Your agreement can only be legally binding if you satisfy these criteria.
Many couples find having an experienced divorce attorney advantageous when writing their agreements. This way, they can protect their assets, including their professional practice, no matter what the future may hold.