Money and Relationships: Prenuptial Agreements

Money and Relationships: Prenuptial Agreements

You may not have dreamed of the day when your future spouse asks you, "Will you sign a prenup?" It's just not as romantic as "Will you marry me?" However, prenups can be an integral part of any marriage, protecting you both in the event of a divorce. Even if neither of you is rolling in the dough before the wedding bells ring. How? Well, let's take a look at all that prenups involve.

The Lowdown on Prenups

If you're not sure exactly what a prenup is, let's look a little closer. Basically, the premise of a prenuptial agreement is to decide before the wedding how your finances will be disbursed at the time of death or divorce. The agreement often protects both parties, since both of you will look over the details and sign in agreement.

Not Just a Rich Man's Paperwork

Oftentimes, the prenuptial agreement is thought to be reserved for the wealthy. However, nowadays signing a prenup can occur at any point in life or in any financial situation. Many people are realizing that they want to protect smaller-dollar savings accounts just as much as wealthy people want to retain their wealth. Additionally, young people just starting out could benefit from a prenup if their life plans change due to the marriage, like if one spouse works to put the other through college.

How Do We Draw Up the Contract?

An attorney can write up a prenuptial agreement per your terms, but it can help to talk about the prenup with your fiancé before seeing the lawyer. Since attorneys charge by the hour, trying to decide the terms of the contract at a meeting that includes your attorney can become very expensive. Instead, it is advisable to discuss everything about your finances and your intentions in the contract beforehand.

What Else Should We Know?

One of the biggest things to be aware of in the prenup process is that you must be fully honest about all of your finances before you sign. If you try to hide any accounts from your significant other, at the time of divorce, the judge can throw the entire contract out.

Also, the timing of the prenup could also bring its validity into question. If the judge thinks that one party may have been coerced into signing the agreement too close to the wedding date, it could be deemed invalid. It may be best to sign the contract more than one month before the wedding takes place.

Finally, signing a document with a less-than-legal appearance could backfire. For example, if you wrote and signed your prenup in a hurry on a piece of scratch paper, it could also be thrown out by the judge. It is often best to follow standard legal procedures, draw up the prenup with a lawyer, and sign in front of a witness.

So that's it: the basics of a prenuptial agreement. It may not be romantic, but it is practical to consider all scenarios, especially since such a high percentage of marriages end in divorce. Unlike many people may think, a prenup is not like betting against your marriage. It is about ensuring the wellfare of both you and your future spouse.

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MoneyCone's picture

MoneyCone wrote:

Wed, 01/25/2012 - 17:48 Comment #: 1

I think a overhaul of our system would be nice. Kobe didn't have a prenup and his ex ended up with 3 of his mansions and a very generous living allowance!

AverageJoe's picture

AverageJoe wrote:

Wed, 01/25/2012 - 19:24 Comment #: 2

It's interesting how many pros recommend a prenup and how often the public throws the advice away. You'd think this would make a dent now in people's thinking....but still seems to fall on deaf ears.

Leigh's picture

Leigh wrote:

Sat, 01/28/2012 - 19:45 Comment #: 3

Good primer on a pre-nup! I will definitely look into one when (or if) I eventually get married, especially with the level of assets I will likely have before I get married, if I continue at my current rate.

Personal finance links round-up « Leigh's's picture

Personal finance links round-up « Leigh's wrote:

Sat, 01/28/2012 - 20:37 Comment #: 4

[...] at MomVesting discusses pre-nuptial agreements. Even if you don’t sign one when you get married, it’s still good to discuss what would [...]

Christa Palm's picture

Christa Palm wrote:

Sun, 01/29/2012 - 19:43 Comment #: 5

MoneyCone, however anyone feels about Kobe's actions off the court, his three-mansion loss sure is a learning point about prenups.

Average Joe, I've heard so many pros to prenups. I can definitely see where prenups could be beneficial.

Leigh, great job on building your assets before marriage!

Money and Relationships: Postnuptial Agreement | MomVesting's picture

Money and Relationships: Postnuptial Agreement | MomVesting wrote:

Wed, 03/21/2012 - 12:15 Comment #: 6

[...] people who marry young don't even think about a prenuptial agreement. Oftentimes, this is because young people don't have assets to consider before the marriage takes [...]