Long before you pop the “M” word, you should pop the “P” word.
As a result of the high divorce rate, changing divorce laws, the trend toward marrying later and great longevity, the number of prenuptial agreements has increased exponentially. A prenuptial agreement (A.K.A. a prenup, premarital, or antenuptial agreement) is an agreement between two people who are planning to marry.
The idea of bringing up a prenuptial agreement, however, still makes many people uncomfortable. Many people carry preconceived notions and baggage about prenups. “Isn’t my future spouse going to be offended?” Maybe, yes – but, it’s necessary to bring it up.
While prenups have received a lot of public and media attention recently, many people still don’t understand their value or how to broach the subject.
Why Get a Prenup?
Why? Bringing up the subject of a prenuptial agreement can be a great way to learn more about one another’s expectations, dreams, and hopes. In fact, more women than ever are instigating prenuptial agreements to protect their assets. Many women today earn a substantial income and have amassed assets of considerable value.
You may have a pension plan, investments, and bank accounts. You may be earning, or anticipate earning, a lot of money and want to retain the right to do what you want with that income after you marry. Whether you have a high net worth or are just starting out, have children or don’t, there are dozens of reasons a prenup is beneficial to you and your future spouse. Here are just a few:
- To protect your pre-marriage nest egg (such as your home, pension plan, stock portfolio, or property with sentimental value) To protect gifts and inheritances you receive
- To ensure that in the event of death or divorce, you will avoid difficult disputes over property (such as family businesses, stock options, professional degrees, licenses and practices, pension plans, and copyrights)
- To ensure that children from a prior marriage receive their intended inheritance
- To insulate ownership in a professional practice or business
- To protect yourself from your partner’s pre-marriage debt, e.g., credit card debt or student loans
- To establish the value of non-monetary contributions to a marriage, such as being a stay-at-home spouse and making career sacrifices
Why Women Should Have Their Own Investments
Investing is a skill every woman should possess. At some point in our lives, 90 percent of women will be single, divorced or widowed, according to the U.S. Bureau of Labor Statistics, and therefore entirely responsible for our finances.
Yet, still, many of us either don’t invest or delegate the task to someone else, be it a spouse or a financial advisor. According to Ellevest, a digital investment platform for women, taking positive action with money is a huge confidence booster for women. Recent data also showed the #1 thing that makes women feel in charge of their futures is “putting away money for financial goals,” followed by how much we save (#2) and how much we invest (#3).
In fact, getting involved with our finances had a bigger positive impact on how in charge women feel, more than how much education we had (#8) and the support we get from our families (spouse/partner, family/parents and even being a mother or a father) (#6, #9, #10).
What many women fail to consider is that we earn less than men, so investing is a way to get even and catch-up. And, since we tend to live longer than men, that money from investing will really come in handy.
Sliding a prenup across the dinner table a week before the wedding is not the appropriate time to bring up this important topic. Conversations about concerns, expectations, and responsibilities are best conducted early in the relationship while dating. As your relationship gets more serious, your conversations should get more detailed and specific.
Where do you normally discuss topics important to your partnership, such as life goals, finances or family? Find or create a calm, neutral spot where you will both feel open, at ease and unpressured. Whether you’re sitting at your living room sofa, taking an afternoon walk or having a quiet dinner, you’ll want to create an environment where both of you are most comfortable — mentally and physically.
Even when couples understand the reasons for marriage contracts, many aren’t sure just how to initiate the discussion. Here are some suggestions to get you started:
- Be open, honest and direct
- State your specific concerns
- Present an idea to be implemented by the two of you over time
- Invite discussion about any underlying issues that arise
- Work out your issues collaboratively
Conversation starters – some possibilities
“Let’s talk about our future, what we both want, our lifestyles, our present, and future finances. I want to make sure all our money issues are addressed and resolved in an agreement. Then we won’t have them hanging over us when we get married.”
“My children are very concerned about my marriage and what it might mean for their inheritance. I’m worried about this too. Since most of my assets are from their father, they are entitled to those assets. They will be happier about this marriage if we do some estate planning. That will make me happier too.”
“I worked very hard to acquire a nest egg, and I want to make sure I have it in the unlikely event the unthinkable occurs between us.”
- Prenup No-no’s
- Presenting the idea of a prenup as a fait accompli
- Springing a prenup upon your intended at the last moment
- Being overbearing or heavy-handed
REMEMBER: Don’t let a prenup fall to the bottom of your “To Do” list. The longer you wait, the harder it will become. The discussions you have revolving around the prenup are conversations you will have once you are married. Getting to know your partner’s position on these important aspects early can help head off more difficult discussions during the marriage. If you can’t talk about touchy issues during courtship, it doesn’t bode well for the marriage.
Arlene G. Dubin is a partner in the law firm of Moses & Singer LLP in New York City and author of “Prenups for Lovers: A Romantic Guide to Prenuptial Agreements.”