WHY HAVE A PRE-NUPTIAL AGREEMENT?
Generally, in a first marriage where both parties have no children, few assets and similar income, there is little reason to enter into a pre-nuptial agreement. If you and your intended have or expect to have a substantial difference in personal equity, earning power or inheritances, if either or both own a business, or if you have children from a prior relationship, the economic and emotional consequences for you, your children and your business could be catastrophic if the marriage fails. A nasty, drawn-out, expensive divorce with your spouse ending up with half of what is left, after legal expenses, can be devastating. Don't you owe it to yourself to get sound legal advice so that you can make informed decisions and engage in sensible planning before you tie the knot?
Love and the hoopla of marriage can easily cloud one's judgment. Misguided assertions that “if you love me you won't pressure me into signing a pre-nuptial agreement” is a trap one can easily fall into. Why should someone who brings very little, economically, into the marriage be able to lay claim to half the marital assets, perhaps have a right to alimony, and other claims, such as inheritance rights to the detriment of your family, if the marriage proves to be a mistake and is short-lived?
Bear in mind that the decision to marry is also one of the largest business decisions you make! Think about the financial commitment you are making to support a home, family, education, health, vacations, travel and so forth, all of which can increase exponentially. In a happy or satisfactory marriage, these costs are accepted as part of life. However, in a bad marriage, which may include a marriage where there is great chemistry and love but one partner has very poor money management skills or very different priorities when it comes to money, these money problems can destroy the marriage and be economically devastating. Marriage is more than a partnership of love and raising a family. Even where a marriage is not a true economic partnership, the economic consequences can be just as great. So, one ignores the business side of the marriage contract at one's peril.
A pre-nuptial agreement is not intended to penalize the less well-off spouse. Rather, it is a sensible way to protect the well-off spouse against a large, unfair loss of wealth simply because he or she got married and the marriage failed. Moreover, a pre-nuptial agreement can provide a clear understanding, avoid unrealistic expectations and misunderstanding. A pre-nuptial agreement can provide for greater sharing as the marriage partnership proves its stability over time and ensure that the value of other spouse's contribution to the marriage (in all ways), is fairly addressed. However, it makes no sense that a marriage partner who brings little into the marriage should be able to benefit at the expense of the other spouse or have an economic incentive to have the marriage fail.
Another benefit of pre-nuptial agreement planning is that one can learn a great deal about each other from the process of discussing and negotiating such an agreement. If one is unable to rationally discuss such important financial concerns in a mature, understanding and respectful manner, perhaps it is a warning sign that should not go unheeded.
Even if you have doubts or concerns about a pre-nuptial agreement, don't you think you should invest in a professional consultation so that you can make an informed decision? And if you are presented with a pre-nuptial agreement to sign, before getting all upset or just signing it, shouldn't you find out whether the agreement is fair from both perspectives and whether there might be a better way to protect one party's concerns without being prejudicial to the other party? Rob Goldman can share his insight and experience with you to help you make an informed decision, including strategic planning guidance through the negotiation process. This approach will strengthen a relationship that is true and provide mutual protection and rewards.