Having an open and honest conversation with your fiancée about money may be uncomfortable, but it is an important discussion to have before marriage. It is especially important that a couple entering a marriage be open and honest with each other about finances. Individuals often have different financial styles, and open communication helps to establish a framework for managing different money styles in a productive way. One way to encourage open and honest communication between you and your fiancée before saying, “I do,” is by creating a prenuptial agreement (“prenup”).
A prenuptial agreement is a private agreement between two parties contemplating marriage. It is treated as a contract that is enforceable by the Courts. The couple arranges, in advance, financial matters in the event of divorce or death. Such matters include student or business loans, credit card debt, and support obligations. The couple may also want to address separate property issues, advanced degrees or licenses and/or businesses started before the marriage. The parties make full disclosure of their finances and with the help of an attorney representing each party, create a mutually agreeable plan that each party supports.
Preparing a prenup provides an excellent forum to engage in dialogue with your soon-to-be spouse about finances. The topic of money can be difficult to address, and often times we avoid the subject, leaving it for another day. Unfortunately, putting off these difficult conversations leaves a couple vulnerable to future negative consequences. Sharing your financial needs, concerns, and views up front with your fiancée places both of you in a better position in the long run. A family attorney or mediator can help facilitate a prenup negotiation, setting the stage for better communication about money, future plans, and many other topics, providing couples with a sense of security about how finances will be handled not only if the marriage dissolves, but if a conflict arises. Addressing your mutual wishes and terms in a prenups minimize the chance for adversarial proceedings or a long and painful court battle.
In my practice, I have seen a spike in couples requesting prenups. People are marrying later in life now, which means they likely have had more time to work and accumulate assets. Student debt is frequently high and many graduates from college or professional school struggle to pay off loans for years. Often, property has been acquired by one or both parties. Some people have children from a previous marriages and would like to preserve assets for them. A prenup addresses the couple’s concerns regarding these types of financial matters prior to the marriage, before a dispute can arise.
Separate and independent counsel for you and your fiancée is crucial in preparing a prenup. It is also important to start the process well before the wedding date. You and your fiancée should consult with an experienced family law attorney to understand relevant law as it relates to your unique situation and to make sure your intentions are reflected in the document.