Marriage has existed since the start of modern history and facilitates our most basic need to love and be loved. It is not surprising then that some of life’s biggest and hardest decisions involve marriage—should I marry and who? When? Should I stay married or get out?
Another difficult decision: Will you take advantage of the opportunity to do premarital planning?
Although premarital agreements used to be common only for members of wealthy families or couples in second marriages, millennials of all income levels are deciding to create these. This may be because millennials are far more likely to enter marriage later, after having established a career and acquired some assets (and perhaps still paying off student debt), and many enter marriage desiring to keep much of their financial lives separate.
Certainly, telling the one you love that you would like to create a premarital agreement can be difficult. However, done correctly and with a positive attitude, premarital agreements are so much more than an “exit plan” for a marriage, providing plenty of benefits for the couple, including:
- Open communication about marriage expectations.
- You will have to talk through big issues such as finances, debt, inheritances, businesses or other large assets, plans for future education or job relocation, and planning, support and parenting for previous children.
- Seeing how your future spouse handles these discussions will help you see where you can improve your communication skills as a couple.
- Peace of mind when spouses are bringing children or unequal assets into the marriage. This planning can:
- Provide a partner with less assets with some financial security if the other spouse passes first.
- Provide peace of mind for a spouse who is leaving their employment (perhaps due to relocation, to assist in a spouse’s business or to care for children) that resources will be available to support them in the event the marriage ends or their spouse dies unexpectedly.
Premarital agreements are especially important if you:
- Have been married previously.
- Have children or are marrying someone who has children.
- Own a business
- Participate in a family business.
- Expect to receive a significant inheritance.
- Are the beneficiary of a trust.
- Own a home, an investment portfolio or other large assets.
- Are planning to marry someone with significant student loans or other debt.
- Work in (or plan to marry someone who works in) a career where there is a high probability of getting sued (like with a doctor or lawyer).
Every marriage, after all, does end—whether through death or due to other issues. It makes sense to enter your marriage with a plan that provides protection for your spouse in case of the unexpected but also spells out how to exit the marriage if that becomes necessary. This may strike you as unromantic lawyerly advice, but I have seen that having a premarital agreement may lessen future emotional and financial heartache.
If you plan to marry and would like to discuss drafting a premarital agreement, please contact Dan Borst or any of Warner’s trusts and estates attorneys.
For help approaching your spouse-to-be to discuss a premarital agreement, see the Legacy Matters blog post on our website, “Roses are Red, Violets are Blue”—Approaching Prenuptial Agreements Positively.