Have you heard? Prenuptial agreements, or prenups, are on the rise. The American Academy of Matrimonial Lawyers reports that 63% of its membership has seen an increase in requests for prenups. It attributes the rise in prenups to the improving performance in the real estate and stock markets, causing couples to realize that the gains would have to be shared if they divorced.
While conventional wisdom suggests that only wealthy people need prenuptial agreements, NerdWallet surveyed 100 financial advisors to see who really needs one. It turns out, the vast majority of advisors surveyed said the most important reason to have a prenup is to have the money conversation BEFORE marriage.
1. Have the conversation that doesn’t happen on (most) dates – talk about the money:
“The most important thing a couple can do is be on the same page financially. It will make for a much happier marriage with a greater chance for success!” – Roger Gainer, ChFC (Mill Valley, CA)
2. Just as important the money conversation is the kids conversation – talk about the impact to children from previous relationships:
“It is particularly important to think about a prenup and estate plans when one or both members of the couple have children from previous relationships – the prenup and updated estate documents help clarify how each member of the couple wishes to take care for one another and their children in the event of a death. The prenup also helps to protect assets that each accumulated prior to the marriage.” – Jean Schwarz, CFP ® (Vienna, VA)
3. Pay attention if you own a business:
“It is only fair to your business partners to hash out the details of your prenup before tying the knot (especially in community property states). Otherwise, they could end up with an extra business partner if you split up.” – Brian Gawthrop, CFP® (Kirkland, WA)
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