First comes love then comes ... prenup?
Yes, this is the reality for many couples facing the prospect of getting married and sharing assets.
If there are concerns around the viability of the marriage the first question should be: Should I get married? That's an obvious question many hesitate to answer. Mostly because we resist using logic concerning an emotional event like marriage. However, the reality is that the divorce rate in America is about 40 to 50 percent, according to the American Psychological Association.
A 2010 Harris Interactive poll of 2,323 adults revealed that 15 percent of divorced Americans regretted not having a prenup. With this fact in mind, asset-heavy, marriage-minded partners may want to consider seeking protection in the event the marriage ends. We've all heard stories of one partner suing the pants off the other in a divorce and walking away with half the estate. For example, Heather Mills, now ex-wife of Paul McCartney, was awarded nearly $50 million after their divorce. Michael Jordan's divorce from then wife Juanita Vanoy cost him $168 million.
As you can see, depending on how much you own, getting divorced can result in financial agony and cost you in the process. A prenuptial agreement may save you from a horrible headache.
If you decide to get a prenup. Open communication about the process is key in getting through the final signing of the document. There may be a host of emotions swirling around as you plan for your marriage while planning for the divorce. After all, that is what a prenup handles -- how material assets are to be divided in the event of a divorce. Many are OK with moving in this direction, while some may be wary of its implications:
"You don't trust me."
"Why are we planning for a divorce before getting married?"
"Prenups are a self-fulfilling prophecy, and I want no part of it."
All are valid concerns and all must be addressed and resolved before saying "I do." It is also important that both parties prepare for the residual resentment and lack of trust that may remain after negotiations. This is where having a prenup is often like a double-edged sword in some marriages. Marriage is intended to be forever, but with the divorce rate moving north, some prefer to be safe rather than sorry.
What Your Prenup Will Cover
A prenuptial agreement may protect you from the following:
-- Property rights: A prenup can determine financial responsibility regarding the home should the marriage end. It can also determine who retains the right to property owned prior to and during the marriage.
-- Fidelity: A prenup can outline what happens if one partner is proven a cheater or admits to infidelity. The consequence may include forfeiting all rights to property or spousal support.
-- Personal rights: A prenup may cover matters concerning the rearing of children and where the couple plans to live.
What It Won't Cover
A prenup does not cover every whim expressed in the document. Your prenup will not cover the following:
-- Any provision that violates state law or policy. For example, while you may waive the right to spousal support, depending on the state, this might not hold up in court. The same applies to child support, which cannot be determined by a prenup as state law prevails in this instance.
-- Undisclosed property. It is key that both parties disclose all property and assets prior to the marriage, or else they may not be covered by the prenup. In addition to being truthful, both parties must enter into the agreement voluntarily. If not, then the agreement may be invalidated in court.
Entering into a prenuptial agreement can be a hairy process. It involves constant assessment of your financial and emotional priorities while planning for "forever." Signing a prenup also begs the question if the couple should get married in the first place, as the intention for marriage isn't a short-term arrangement but "'til death do us part." If you do opt for a prenup, note your state laws and be sure that your concerns are addressed and advocated for in the final document.
Ginger Dean is a licensed psychotherapist and founder of the personal finance website Girls Just Wanna Have Funds.
More From US News & World Report
- 13 Money Tips for Married Couples
- 5 Ways Sharing Finances Can Be Bad for Your Marriage
- 13 Lucky Events That Call for a Financial Plan
- Personal Finance - Lifestyle