Apart from child custody issues, property division is often one of the most contentious aspects of any Arkansas divorce. This is especially true when the couple has amassed a substantial amount of wealth or when there is a significant disparity in the partners’ earning potential.
Considering that nearly 25 percent of marriages end in divorce within the first 10 years, it is not unreasonable to consider creating a prenuptial agreement before getting married. In fact, in many cases, creating a prenuptial agreement can actually help make a marriage stronger, because it forces the partners to discuss sensitive financial issues that may have otherwise become a source of conflict later down the road.
Before getting married, there are three important financial conversations that every couple should have:
Credit and Debt: These days, nearly everyone carries some form of debt, whether it’s credit cards, student loans, a mortgage or something else. It is important for both partners to disclose all of their obligations and liabilities. A prenuptial agreement should outline who is responsible for paying which debts in the event of a divorce.
Premarital Assets: During a divorce, all marital assets will be equitably divided among the two spouses. Thus, it becomes very important to protect the assets that predated the marriage. For example, once spouse might have valuable real estate, significant savings or family money that should stay with them after a divorce. It is important to disclose all of this information before getting married and to keep detailed records of any premarital assets.
Financial Planning: Couples can help ward off financial conflict by creating a joint financial plan. If each partner knows the other’s short- and long-term goals and spending habits, there won’t be any upsetting surprises later on down the road.
Source: The Huffington Post, “3 Financial Steps to Take Before Your Wedding Day,” Gabrielle Clemens, July 31, 2012.
For more information about financial planning before marriage, please visit our Little Rock Prenuptial Agreements page.