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When do you need a Prenuptial Agreement? What are indicating factors?

Age: This indicator plays into the indicators below. The older someone is, the more likely it is that they will have had a previous marriage, substantial assets that are individually owned, or a business that they own. Considering this economy however, there are a lot of younger entrepreneurs out there in the business world, so age is not always an indicator of how likely you are to need or want a prenuptial agreement.

Previous Marriage: Someone typically might think that a person with a previous marriage just wants a prenuptial agreement to save themselves some of the hassles of another divorce proceeding. There are other factors at play here however and a number of reasons that a previous marriage could affect the financial situation of the next marriage.

Substantial Assets: The best use for a prenuptial agreement is for protecting assets that were owned before marriage. The more that you have to protect, the more sense it makes to have a prenuptial agreement in place so that a future spouse cannot try to take assets that were earned before the marriage. The rules of commingling are incredibly complex at times—commingling being a situation in which assets acquired before a marriage are mixed with marital funds. Additionally, many people find, much to their chagrin, that the rules of what is marital and what is separate property are not as intuitive as one might like.

Business: If you are a business owner, you probably have a lot of time and effort put into the business. Because you work at the business, you probably consider it something akin to a job. In truth, a business is an asset. There are ways in which this asset can become marital. Sometimes this can mean that during the pendency of a divorce the function of a business can be disrupted because the opposing spouse lays claim to part of the business. Again, the rules here can be far less than intuitive. A prenuptial agreement can protect this asset.

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