I often advise clients on prenuptial agreements when they find love again. I stand by my assertion that it's the right way to start a new marriage. Far from impoverishing a spouse if the marriage doesn't work by having accounts titled and access in one spouse’s name, the right prenup can reassure that new spouse that they will treated fairly, even generously, in the event of a divorce.
Prenups prompt questions. Prenups clarify unspoken questions. This is good.
But some very religious people cannot have a prenup because their religion doesn't allow it. Other people just get queasy at the word "prenup," as it if will jinx the marriage. I can understand the feeling it illicts from all the negative stories we hear from friends and media.
If you are one of those people, please pay attention.
There is an alternative to prenups. It is to structure accounts so that money can be accessed by both partners, while protecting other funds.
Lea is a perfect example. I served as her financial fiduciary in her divorce. She negotiated a good settlement, went back to work after sixteen years after her role ended as stay-at-home mom, developed new interests, made new friends - and fell in love. She came back to me because we'd agreed that if ever were she remarry, we'd sit down first.
She felt strong the pre-nup was direct conflict of her religious beliefs.
We developed an alternative - a way to protect her assets while honoring her religion and personal beliefs in love and commitment.
Jean wanted to fresh start with her new husband, to build a good life together. So the income she earns—about $80,000/year—goes into the couple’s joint checking account. Combined with his income, they will have a plentiful life.
We kept her brokerage accounts entirely separate from money used to finance marital life. None of her savings and investments go into their joint checking account. She uses money from her brokerage accounts to do things on her own—buy gifts, take vacations with her daughters, and pay for anything she would like to share.
She can even buy gifts for her husband with those funds. Her gifts to him would remain his, and they would be considered separately in the event of a future divorce.
Before the wedding, I documented her entire marital estate and archived it so that she will always have a baseline of what she owned on the day she married. What is solely hers will remain hers as long as she sticks to the plan. I did this at the guidance and advice of her attorney as well.
I created the best protection possible for her under the circumstances.
You can protect your assets even if you are if you don't have a pre-nup. But you need to start this before the wedding. it is imperative that you develop and record a complete and accurate picture of your financial circumstances. Ask a financial fiduciary how to structure this process for yourself. You'll need to be careful to stick to the rules developed so that what is yours remains yours on the chance that the marriage does not last forever and when it does… You have plenty more to work with in retirement.
* * *
If you are nervous about bringing up the subject of money, or if you find your attempts to discuss it shut down by your betrothed, then something is wrong. It needs to be addressed, and don't marry until it is.
I've seen people with significant resources and strong personalities shutdown when it comes to talking to their fiancées about prenups.
They somehow think that talking about keeping their assets separate is a sign of distrust. But the truth is, fear of bringing up the subject is the ultimate distrust. That fear tells them that they don't trust their fiancées to have an honest conversation about something that is creating anxiety.
If you can't trust that person to react reasonably to a discussion, why would you marry that person? What else will you not discuss because of fear of how they will react?
People who truly trust each other can talk about money.
* * *
Prenups can demonstrate love and caring attention to how their partner can be honored in case it does not work out. It is a great opportunity to craft your existence together honoring what you both already have or how to best title what you will build together.