Pre Nuptial Agreements – May Not Be Romantic, But Surely Wise
April 6, 2013
One of the wisest things a couple can do prior to marriage is draft a pre-nuptial agreement. A pre-nuptial agreement (pre-nup) is a legally binding contract that sets out how the couple will handle their affairs should the marriage not endure. I believe the pre-nup is important because for not only the obvious protections that it provides to the prospective couple, but also for the process the parties must go through to agree upon a document they each can sign.
In drafting the pre-nuptial agreement, a couple must have open and honest conversations with each other about finances, health, their dreams and goals for the future. Their talks should include how they anticipate how their household will be managed, how duties will be shared (or not), what will happen should one party be unable to work. In considering what will go into the pre-nup, the couple should consider realistic things that will shed light on how they live their lives, including: how they will support one another during separation and divorce, how they will hold property during marriage and divide property in divorce, retirement planning, and retirement accounts (if any), how they wish to have their wealth managed and transferred upon death.
For many years, the pre-nuptial agreement was considered the tool of the wealthy older man marrying the younger woman. No longer. Since the pre-nup is a basic tool that can confirm and or modify certain legal rights and obligations incident to a marriage relationship, anyone can (and probably should) use it. If, for example, one party is coming to marriage with large personal assets, family business interests, or an anticipated inheritance, either the prospective spouse or his/her parent(s) wishing to maintain the family legacy, might desire a pre-nup. In older couples or those coming from a prior marriage a pre-nup can protect the inheritances of children from a previous marriage. In same sex marriages couples may find items unique to their circumstance that best can be addressed in a pre-nup.
When embarking upon a marriage we like to think it is forever. The reality today, however, is that fifty percent of all marriages end in divorce. There are many reasons for this, but failure to fully and honestly think through finances and life choices with your partner before marriage should not be one of the causes. So let us think of the pre-nup as a way to strengthen a marriage rather than just planning for the possible eventuality of its demise. It may not be romantic, but it is wise.