This is wedding season and planning a wedding without a pre-nup is a HUGE mistake. The hard truth is that one in every two marriages will end in divorce and it’s better to plan ahead while you’re all lovey-dovey. Right now you are hoping you survive the wedding to get to the honeymoon. Yet, I can almost guarantee you that you have not discussed investment strategy, fiscal management or child rearing, let alone how much you’ll be inheriting in the next few years from Aunt Tessie or how much one of you will reap in when you take over the family business.
It doesn’t matter if you’re 25 and this is your first marriage or 45 and this is your fourth trip down the aisle with five kids by your first three husbands. Pre-nups go hand-in-hand with hiring the perfect party planner. Further, they do not kill the moment or put the kabash on your future happiness. In actuality, they indicate that you are a take-charge, responsible couple, ready to handle whatever crisis comes your way.
1 If white is the new black, then pre-nups are the new personal vows.
“You are my heart and soul – you are the air that I breathe – you’ll make me gag when I take 50% of everything you own!”
Most certainly, your romantic vision of your Big Day contains elements of personalizing your ceremony and the most likely aspect of that includes writing your own vows. That’s sweet but why would you expend so much anxiety and effort writing ten or twelve lines that will be over and forgotten by your first anniversary and not spend just as much time drafting a blueprint for your future? A pre-nup should be the contract that binds you together and leaves no surprises should you need to go your separate ways.
2 Get to the nitty-gritty.
So, what can you include in your pre-nup? The short answer is just about everything, including how many times a week you will or won’t share the same bed. The more serious answers require some thought.
- Do you know each other’s salary? Really? Have you seen a paystub?
- Do you know how much debt the other carries? School loans, credit cards, overdue taxes, car loans, ex-wives and child support are just some of the items you each have every right to know prior to saying “I do.”
- Do you know each other’s assets? Real property, investment portfolio, savings bonds, a family trust, a family business, Lamborghini, diamonds from your first boyfriend (ah, the memories!)
- Do you know each other’s spending habits? Do you get a mani-pedi every Friday and does he hit the road for a football weekend once a month?
- Where will you live? His house, your condo or are you buying a new love nest?
- Do you each have a retirement account or pension? What is it worth? Do you want to carve it out and keep it separate?
- Is one of you responsible for helping your parents? Do you have a problem with him supporting his aging mother and vice versa?
- What happens when you die? Who do you want to give your doll collection to and who gets his Lamborghini?
- Will you open a joint account to manage joint expenses? If so, who will be the main money manager?
- What percentage of your individual salaries will be deposited into this joint account?
- Will you be able to do whatever you want with the remainder of your own salary?
- What financial goals do you have as a couple? Are you saving for a house or do you want to take a European vacation every year?
- What about life insurance? If you cannot maintain your marital lifestyle without the salary of your spouse then you need life insurance.
- What about after death? If part of the negotiation of the pre-nup involves waiving any or all spousal rights you have to hubby’s estate, then make sure you know what the statutory spousal share is in your state. As much as you may like to disinherit your spouse, you cannot do so absent an agreement to the contrary. Currently, the vast majority of states designates, by law, a spousal “elective share” of an estate, which is typically one-third of the net estate. That is a lot of money to give up depending on your circumstances. Be aware of what your options are before signing the pre-nup.
Marriage is the biggest investment of your life, for richer or poorer (although richer is always better). So, how do you get your fair share? Pre-nup, pre-nup, pre-nup!
A properly drafted pre-nup will clarify what percentage of individual assets each of you will be entitled to if the marriage was to end tomorrow or in ten or twenty years. The percentages may be on a sliding scale based on the duration of your marriage or they may be based on a morality clause, just in case one of you has a wandering eye. Better to plan this out now then when you are spitting blood and shooting flames from your eyes at each other. No one thinks rationally with so much venom in the air!
Now that you know you should have a pre-nup, when should the discussion begin? The short answer is as soon as the relationship starts to look serious, ask each other how you feel about pre-nups? Don’t be offended by it.
I have had way too many clients call me up the weekend before their wedding, even two days before their wedding, and ask about getting a pre-nup drafted. Are they serious? Don’t they know lawyers go away for the weekend?
If this is the second most important aspect of your marriage to saying “I do,” then why is it treated like a step-sister seated at table 25 in the back corner near the band? If you say “I do” with the thought that you can draft a post-nup when you get back from your honeymoon, the chances are that it will never get done
Nothing is forever, which is why you are drafting a pre-nup in the first place. The pre-nup is a contract and can be modified at any time for any reason provided that both of you subscribe to the new agreement in writing.