Since Valentine’s Day is a common marriage proposal date, it seems an appropriate date to talk about, yes, prenuptial agreements.
Prenuptial agreements get a bad rap and carry a mostly negative stigma because they are associated with one spouse wanting to protect assets from the other upon a termination of the marriage by death or divorce. That may be one purpose, but these agreements can be so much more. They can:
- Encourage a healthy discussion of finances and expectations for the marriage, similar to that included in premarital counseling required by many religions.
- Offer financial security to a spouse that has less property and wonders how he will be able to afford the upkeep required of the home in the event of his wife’s death.
- Afford peace of mind to a spouse who is moving to a new city/state or quitting a job for the marriage, so she can know that she will have resources available to support her in the event of termination of the marriage.
- Protect a spouse if there are children from prior marriages. The agreement can document your intentions to provide for your spouse upon your death, avoiding challenges to your estate plan by your children.
To achieve these positive benefits, you must be very thoughtful and intentional about how you approach the topic, the agreement and its negotiation.
- Give thought to what your fiancé’s concerns or fears might be so that you can be better prepared to address those in your discussions. Is your fiancé financially secure in his or her own right, or will the agreement need to provide additional financial security? Will your fiancé view a prenuptial agreement as contrary to the idea and partnership of marriage? Will the agreement be viewed as establishing power and control, or conversely, eliminating power and control?
- Give thought to the purposes of the agreement, and the reasons for those purposes, so that you can communicate clearly why the agreement is important to you, and perhaps others. For example:
- Are you wanting to protect very specific assets, such as ownership in a business? If so, is there a company policy or agreement among the owners that ownership remain within the hands of current owners and their descendants?
- Do you have children whom you need to support or whom you want to inherit assets at your death?
- Consider, how and where you will approach the subject with your fiancé. A private, calm setting is best to allow thoughts and emotions to be fully shared. After the topic has been raised, subsequent meetings can be held with a trusted family advisor or attorney to assist explaining the concept, reasons or process.
- Start the discussion gradually and communicate fully. If your company has a policy that all owners have prenuptial agreements, inform your significant other about this before the engagement. Express your reasons for desiring a prenuptial agreement, and be prepared to address your fiancé’s anticipated concerns about entering one. If your fiancé is strongly opposed to or offended by the topic, give it a rest for a while before raising it again.
- Broach the subject as far in advance of the wedding as possible, and preferably in advance of or immediately following the engagement. You both will need time to consult with your attorneys (you both will need separate attorneys), and drafting and negotiating the agreement can take several months. Neither of you will feel secure or positive about a last minute negotiation, and a hurried document is less likely to hold up in court later. Your goal should be to have the agreement completed before you send out your wedding invitations.
- Be prepared to fully disclose all of your assets, your annual income, and any other material information that may impact the decision to get married. This includes criminal record, physical health issues (such as STDs) and mental health issues, as full disclosure is required for the agreement to hold up in court. Disclosure of net worth can be challenging, especially if your fiancé has little or no indication of your net worth. Be prepared to discuss how you view your wealth and what it means to you, and if it is family wealth, your sense of responsibility to honor your family’s legacy.
- If you reach a point where you are having difficulty discussing the agreement with your fiancé or moving past an issue, consider professional help. Marriage counselors can work wonders to facilitate a healthy discussion of money and partnership, and counseling prior to marriage can result in a stronger, healthier marriage.
Finally, keep in mind that the end goal is to get married and to have a happy marriage. The agreement should strengthen, not weaken, your relationship and partnership.
Contact your Warner attorney or Susie Meyers to learn more about creating a positive outcome from your prenuptial agreement discussions.