Getting married is supposed to be a happy time. You’re committing yourself to your partner for a lifetime. That’s why it’s natural to feel wrong about planning for the failure of such a commitment. But depending on your situation, it may be prudent to step back from the emotion and consider a pre-nuptial agreement
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Pre-nuptial and newer post-nuptial agreements can offer protection for people who bring assets they would like to or need to protect to a marriage. In some ways, it’s not all that different from buying car insurance. You never hope to use it. But we all know car accidents happen, even to the best drivers.
Who Should Consider a Pre-nup?
Not everyone needs a pre-nup. Two people who enter into a relationship with equal current and potential future assets most likely don’t need the protection. But as the average age of men and women at their first marriage is at historical highs, the odds of them having accumulated some level of personal wealth prior to meeting increase. That may be one reason to consider a pre-nup.
Pre-nups can cover as little or as much as you think may be necessary to include. You may want to shield a business you have started or preserve assets for children from a previous marriage.
Where to Start
Many people recommend having the pre-nup conversation very early in a relationship. In some cases, signing one too close to the wedding date can imply that somebody has been coerced into signing it and thus nullify it. Include it in healthy conversations about your views on life, finances, family, etc.
Once you’ve had that discussion, it’s time to decide what assets you want included. It may be retirement funds, savings, investments, businesses or other assets like homes, heirlooms or future inheritances. Consider whether you are protecting an asset at its current value or its future value. Once you’re on the same page, it’s time to find your attorneys.
A pre-nuptial agreement is a legal document. Don’t think you can just create a list of “his and hers” assets, sign it and be done. Do-it-yourself forms might seem like a cheaper alternative, but they may not hold up if challenged in court. Spend the time and money to find an attorney experienced in pre-nups and the laws in your state … and then find another one for your spouse. Most states require separate counsel for each party for the document to be valid.
Already Married?
A relative newcomer to the marriage arena is the post-nuptial agreement. Sometimes there are things that people don’t discover about their spouse prior to marriage, such as poor spending habits or drinking problems. Signing a post-nup doesn’t mean you’ll soon be signing divorce papers; it can be as simple as addressing a changing financial situation, like an inheritance or significant salary raise.
Pre-nups aren’t just for Hollywood or the super-wealthy; nor should they be an indication of a person’s confidence in the longevity of a relationship. If a pre-nup is a fit for you, add it to the list of the other pre-engagement conversations you have with your significant other—like squeezing the toothpaste from the bottom, where the toilet seat belongs and who takes the garbage out.
Via: Forbes.com
Article: Northwestern Mutual
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