By: Dina De Giorgio
Many engaged couples learn about their partners financial habits while planning for their wedding. How the wedding budget is handled, no matter the size budget, offers the perfect opportunity to see how your future spouse handles money and provides a pathway for long-term discussions about future finances. At first glance, including a pre-nuptial agreement on your wedding checklist may seem unromantic and cynical, but really it is the most loving, realistic, and intelligent way to approach a marriage for many reasons.
Going into your marriage with a clear understanding of how finances will be handled allows a couple to focus on more important issues like being a couple and investing in the relationship goals. Vastly different money philosophies can lead to divorce if couples do not recognize these issues early in the marriage and address them. A Pre- Nuptial agreement will help establish the financial health of the couple and avoid an expensive and complicated divorce if the marriage fails.
Having assets and debts defined prior to marriage, allows the couple to establish their individual and joint responsibilities for their marital financial health early in their marriage which leads to better communication about finances which leads to fewer “money fights,” a leading cause of divorce.
Traditionally when the topic of a pre-nuptial agreement is raised it conjures images of the rich and famous, but singles who may not see themselves as “rich,” should also be concerned with safeguarding their wealth. A pre-nuptial agreement is a good way to safeguard assets and income earned prior to the marriage as well as define who is responsible for debts such as student loans that were incurred before the marriage.
Today the average age of people getting married in the US is 28 years of age. By this age, many singles have incurred debt but also may have assets like retirement accounts, real estate, or investment accounts. A pre-nuptial agreement is beneficial is to establish the division of income, investment accounts, debts, real estate, retirement accounts and the payment of alimony or maintenance in the event of a divorce. This approach improves communication around money issues and creates future security if the marriage fails. On the other hand, decisions related to child support and custody of children should almost never be included in pre-nuptial agreements. No one can predict the specific needs of your future children and your parenting responsibilities. These kinds of discussions are better left out of a pre-nuptial agreement.
Ideally everyone who is planning on getting married should think about a pre-nuptial agreement. If you respect and love someone enough to get married, you should also be brave enough to decide what would happen to each other if you got divorced. Take our quiz and find out if a pre-nuptial agreement is something you should consider.
Do you Need a Pre-Nuptial Agreement?
If you answer yes to three or more of these questions, you should consider a prenuptial agreement:
- Does your future spouse have debts, like student loans?
- Do you and your future spouse intend to purchase a home in the near future?
- Do you own the home that you and your future spouse live in or intend to live in?
- Do you or your future spouse have benefits such as health insurance, retirement accounts, pension benefits and life insurance through your employer?
- Do you have a savings account with a balance of more than $25,000?
- Do you own your own business?
- Are you currently providing financial support to your future spouse while they search for employment or finish school?
Dina De Giorgio is a veteran attorney and mediator based in SSRGA’s Long Island office. She has over 30 years of experience handling divorces and other family law matters. Dina can be reached at 212-743-7047 and ddegiorgio@ssrga.com.