An ante nuptial contract (or prenup) is often seen by couples who are planning their wedding as a harbinger of doom. There’s almost a perception that “If you love me you won’t need a contract.”
But it really isn’t.
In my mind, signing a contract with your betrothed is a way of showing them how much you love them simply because it’s a way to make sure that no matter what happens to one of you, the other will be looked after.
You can have insurance policies and you can have a will, but that’s not enough.
Let me see if I can explain what I mean in layman’s terms…
Michelle and Bradley get engaged. Michelle has her own business and Bradley is gainfully employed. They’re both doing fairly well financially and they want for nothing. They’ve been living together for some time and they’re now planning their wedding. They celebrate a gloriously memorable day with friends and family, without an ante nuptial contract.
Five years down the line, Michelle’s business has taken off and she employs several people. Bradley has been promoted several times and he’s all but running the company he works for.
Michelle needs bigger premises for her business, but even though Bradley is not necessarily an investor in her company in any shape or form- she still has to have his signature on any kind of lease agreement!
Just one year later, the economy has taken a drastic turn for the worse and Michelle’s business goes belly up. She has to retrench her staff and she owes the bank thousands! Because they got married without an ante nuptial contract, Bradley’s assets can be claimed by Michelle’s creditors to cover her debt!
Another scenario would be that either Bradley or Michelle- heaven forbid- passes away.
Without an ante nuptial contract, all their assets would be frozen until the estate could be sorted out! Can you imagine Michelle trying to run her business and pay her staff and see to debtors and creditors when all her and Bradley’s assets have been frozen? And an estate can take MONTHS to sort out!
There are different forms of contract as well- with and without accrual, but that’s going to get very technical so I would rather send you here to read up on it all.
An ante nuptial contract is not only “in case of divorce” or only for the filthy rich.
