Many Americans work hard to plan for their financial futures and take steps to secure their monetary assets. These individuals may purchase health insurance to protect against unexpected medical bills, buy life insurance to offset expenses after the death of a loved one, and even diversify their investments to mitigate risk. However, despite all this meticulous planning, independent research, and consultation with financial experts, one of the most significant risks to an individual’s finances often goes unaddressed: their marriage.
“Despite the high rate of divorce in this country, a lot of people ignore the possibility of it happening to them, and never discuss or plan for how to divide their assets if their relationship were to dissolve decades from now by creating a contingency plan,” Attorney Billie Tarascio explained. Fortunately, there are several ways to secure one’s finances in the event of a divorce, such as prenuptial and postnuptial agreements.
Prenuptial agreements are legally binding contracts between individuals prior to their marriage, and are commonly referred to as “prenups.” These agreements allow couples to account for their assets, debts, and other property and agree on how they want these items divided if their relationship changes and they decide that a divorce is necessary.
Likewise, a postnuptial agreement is a legally binding contract that is drafted and executed after the couple has gotten married, but before divorce proceedings have been filed. This document, like a prenup, also allows the couple to agree on the division of their assets, debts, retirement accounts, and other properties before a breakdown in communication, and before heightened negative emotions have occurred due to a pending divorce.
Moreover, taking the time to plan for divorce beforehand helps to cut costs significantly, and can save time if a divorce proceeding is ever filed. This is because, if a couple has already formally agreed in writing how their assets, debts, and other property will be divided, there is no need to argue about which person should keep the house, car, a sentimental item, or a retirement account in court—because a legally binding plan for this exact scenario already exists.
On the flip side, individuals who have not prepared for divorce may find themselves wrapped up in a lengthy divorce and property distribution proceeding. They may even end up draining assets and taking on debt as a result of this process, leaving the parties to walk away with only small fractions of the money that was once in their accounts by the time a final judgment has been made. Instead, with a little planning, the divorce process can be far less time-consuming, far simpler, and could leave each person’s share of their accounts, assets, and other property intact.
Hemant Kumar is a project manager at Tridindia with more than nine years of commendable experience in writing about LMS, translation, and IT. His unmatched talent and passion for digital marketing gave him the opportunity to work as a multi-tasking project manager at TridIndia’s sister company, Link Building Corp. Today, he contributes to the world by imparting knowledge on SEO, link building and internet marketing etc., that helps business owners grow their online business.