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Why prenuptial agreements aren't just for the very wealthy

Most people are vaguely aware of what a prenuptial agreement is and that it protects the assets an individual brings to a marriage from being divided should that individual later divorce. Many people have misconceptions about prenuptial agreements and wrongly believe they are only for the very wealthy. While individuals with considerable wealth should definitely execute a prenup prior to walking down the aisle, this legal document can also provide important protections to individuals of lesser means.

While having a prenuptial agreement is traditionally viewed as a way to protect pre-marital assets, the same can be true of protecting against pre-marital debts. According to nerdwallet.com, as of September 2014, Americans have amassed $1,120.3 billion in student loan debt. In a marriage, it's common to eventually refinance or consolidate debt. It's wise, therefore, that individuals who plan to marry someone with a significant amount of student loan debt consider a prenuptial agreement.

While assets accumulated during a marriage are fair game during a divorce settlement, assets that are inherited or acquired via a trust fund are typically considered off limits. That is, until an individual uses inherited or trust fund assets to purchase a home or car that is owned by or for the benefit of both spouses. When these assets are comingled, as typically occurs in a marriage, they become marital assets and can be divided should a couple subsequently divorce.

Another important consideration for couples planning to marry and contemplating a prenuptial agreement relates to professional licenses. Individuals who are nurses, doctors and lawyers have all gone through a considerable amount of schooling, training and testing to obtain a professional license. In the event an individual divorces, an ex-spouse could attempt to reap the benefits of all that hard work by seeking assets related to the cost of obtaining a professional license or based upon a spouse's "future earning potential."

With the U.S. divorce rate hovering around 50 percent, anyone who gets married would be wise to contemplate how their life and possible financial health could be impacted by a divorce. Regardless of wealth, Chicago area couples who plan to marry would be wise to seek the advice and assistance of an attorney who handles prenuptial agreements.

Source: Main St., "Why You Need a Prenup to Marry Even If You Think You're Poor," Marc Levy, Oct. 6, 2014

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