Marriage is not just an emotional and physical union, it’s also a financial union. A prenup and the discussions that go with it can help place the financial well-being of the marriage on a solid foundation. The contract spells out how assets will be distributed in the event of divorce or death.
Getting to know your assets and property can help you decide if you need to have a prenuptial agreement before you get married.
There are three steps to determine this:
1. Take a Prenuptial Quiz.
If you and your spouse-to-be answer yes to any of these questions, chances are having a prenup is helpful. If most answers are no, a prenup can still be helpful though not as critical.
- Do either of you possess any real estate?
- Do either of you possess money amounting to $50,000 or more aside from having real estate?
- Do either of you own a business?
- Do either of you earn more than $100,000 annually?
- Do either of you have any valuable employment benefits like stock options or profit sharing, or have you earned more than a year’s worth of retirement benefits?
- Do either of you plan to pursue an advanced degree while the other one works?
- Do either of you have other heirs for your estate other than your spouse when you die?
2. Identify Important Issues
List all the issues you want addressed in a prenuptial agreement. In this way you can check and discuss these issues with your spouse-to-be. These issues may touch upon subjects like separation of property, how to handle money and property during the course of marriage, alimony, or how your property will be treated after death.
Other common prenup topics may include:
- Joint or separate property
- Estate planning issues, including leaving family property or provisions for children from previous marriage
- Handling of separate businesses
- Separate handling of each person’s debts
- In case of separation or divorce, who gets what, including alimony
- Income tax returns, filing and allocation of income
- Who will be responsible for the household expenses and how payments will be funded
- Managing joint bank accounts and separate bank accounts
- Specific big ticket purchases
- Credit card charges and and how payments will be funded
- Investment and savings plans for the future
- Arrangements regarding education
- Agreements regarding the provisions for the surviving spouse just in case the other one passes away
- How to settle disagreements in the future.
3. Assess your Comfort Level
On a scale from 1 to 5, with 5 being the highest, how comfortable are you with the idea of having a prenup? How comfortable do you estimate your spouse-to-be will be with a prenup?
Score of one to two:
What are the reasons for your discomfort? Are you unsure whether you are in a better legal and financial position without a prenup vs. with a prenup? Do you know enough about the laws and regulations about prenup in your state? Are you worried about offending your fiancé? Is it possible that the two of you need to be able to talk about difficult matters in a loving way, as a way to pave the way for more open communication with your spouse-to-be in the future?
Score from three to five:
If you are comfortable enough to talk to your fiancé, then go ahead and start discussing the specifics. Discussing it in a level-headed manner can be a good start to see each other eye to eye. Be open about the discussion and don’t take all in one go. Take your time, be open minded and build on trust, openness, and transparency.
Source: 1-2-Law: https://www.12law.com