By John Drachman
Corinthians tells us “Love is patient.” Still, for those getting married during our Coronavirus-haunted time, patience may be in short supply. Determined couples though are finding ways to say “I do” in front of families and friends even from a safe social distance.
Despite best intentions and the fact that the divorce rate has been falling from 50% for years, the continued stress of our open-ended crisis can cause even the most star-crossed lovers to call it quits. According to Renee Peltz Dennison Ph.D, while the average first-timers have a 75% chance of staying married, the odds quickly reverse for couples entering into their second or third marriage. Rather than leaving a lot of loose ends around to trip up a marriage, a prenuptial or postnuptial agreement can keep expectations and assets organized and transparent.
Without such agreements, the moment you utter, “I do,” many of your assets automatically become marital property. These might include retirement assets, stock options earned during the marriage, and real estate purchased since your marriage. Here’s how to determine whether a prenuptial or postnuptial agreement is right for you.
For first-timers, prenuptial agreements usually aren’t needed
Most young couples getting married for the first time have no need for a prenuptial agreement. The one exception might be if a spouse is expecting a large inheritance or distribution from a family trust. In contrast, attorneys generally agree that prenups are essential for those with significant assets and complex marriage histories. In the event of divorce, a prenup can also protect a spouse from being liable for the other spouse’s debt. While you may be required to pay alimony without a prenup; with the agreement, you can predetermine a specific alimony amount.
Forgot the prenup? There’s still the postnup
Amid the chaos and excitement of marrying during a pandemic, some couples may neglect to get their prenuptial agreement signed before taking their vows. Relax; there’s a postnuptial agreement for you.
All states now recognize postnuptial agreements. While almost identical to prenups in content, postnuptial agreements as the term implies are drawn up after the marriage license is issued. When faced with aging couples who’ve remarried, have sizable assets or large estates, divorce attorneys agree that a postnuptial agreement is better than no agreement at all.
The bottom line
As calculating – and unromantic – as these agreements may seem, couples will find themselves more able to handle the financial resolution of property and assets more amicably and quickly in the event the marriage founders. Also, some of the new provisions in the Tax Cuts and Jobs Act impact divorce; such as the tax treatment for alimony and the elimination of the exemption for dependents. For reasons like these and others, it’s a smart move to bring an attorney or financial consultant into the wedding picture before signing on the prenup or postnup dotted line.
John Drachman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. John is an IABC award-winning writer, who applies his 30 years of financial marketing experience toward advancing the dialog between investors and investment professionals.