Do We Need a Prenuptial Agreement?
One simple word can bring dread to an otherwise happy time in your life: prenup. It’s easy to understand why the mere thought of this concept might make you or your bride feel very uncomfortable. Prenuptial agreements are all about money — and money is the No. 1 issue that new brides and grooms fight about. It might sound like a disaster, but this is a great opportunity to put your heads together and make a sound decision.
The most important thing to remember when it comes the prenup is to educate yourself as much as possible. If you’re not 100 percent familiar with how a prenup works, here’s a quick summary: Legally speaking, marriage isn’t only a spiritual and emotional union — it’s also a financial one. A prenuptial agreement outlines what will happen with property as well as whether spousal support is necessary in the event of divorce or death. Because approximately one in every three marriages ends in divorce, it’s understandable why legal and financial professionals believe prenups are necessary. However, although prenups are by no means a requirement for getting married, we highly recommend at least discussing the idea with your fiancée.
Here’s a guide to making a solid decision.
Talk about it
We know it won’t be the most pleasant conversation, but sit down with your fiancée and discuss your financial situation. If you haven’t discussed finances yet, this is a great time to start. Get a feel for what each of you will be bringing to the marriage in terms of assets and property.
Make a decision and then follow through
Maybe it’s too difficult to discuss or neither of you are happy even thinking about the remote possibility that your marriage may not work out. There’s nothing wrong with that. In fact, it’s a great sign that you’re both confident you’ll be spending the rest of your lives together.
But if you decide to go through with a prenup, draft a list of all assets and property and how you’d ideally like it divided. The typical rule of thumb is that you only take out what you brought in. Or in other words: No one can profit from the marriage. It’s important to make this list ahead of time because it will decrease the amount of time your lawyers will require. You’ll both need to hire separate attorneys for the process.
Who should consider getting a prenup?
If you fit one of the following descriptions, a prenup may be something you should seriously consider.
- Those who already own a significantly greater amount of assets than their future spouse
- Business owners
- Those with children from a previous marriage
- Those pursuing a career in a high-pay industry (such as medical or law)
- Those supporting elderly or sick parents or relatives
- Those planning on collecting a company pension or have money set aside for retirement
TMR Recommendation: Decide with your fiancée if a prenup is something you want to proceed with and then do your homework. Never sign a prenup due to pressure from a family member or friend. This is a private decision to be made only by the couple.