Some of the hardest conversations you and your partner will have as you plan your wedding are about finances. Budgeting for your big day is important, but it's the prenup conversation that can be the most stressful. After all, what is sexy or romantic about deciding how you'll divide your assets in the event of a divorce? If you think a prenup might be right for you, these expert tips will help get that conversation started.
The best way to have a productive conversation about a prenup is to make sure you're bringing it up in the right light. "People have such negative reactions to the idea of a premarital agreement," says Anne Freeman, partner at Sideman & Bancroft LLP. "If you start instead by asking your partner about how you'll address your finances in the future, from investing to opening a joint account, it puts it all in a much more positive light."
Freemen emphasizes that, just like a 401K or estate planning, a premarital agreement is just a financial planning tool to help you have discussions about what your finances will be like during your marriage.
"Instead of talking about what it might look like when you get divorced, you're actually working to prevent a divorce," Freeman says. "Look at it as advanced marriage counseling: You'll discuss any career expectations you might have (such as whether you intend to stop working to go back to school in a few years) and your plans for investing and joining finances, so considering a prenup can really help get you and your partner on the same page."
Adds Monica Mazzei, also a partner at Sideman & Bancroft LLP: "It's best to talk about a prenup in terms of fears and goals. Some people put more value on financial independence, while others may be focused on preserving existing wealth for their children from a previous relationship. Others still may have lived through their parents' divorce, and want to ensure a more amicable process should it ever happen to them. When you and your partner understand the reasoning behind the request for a prenup, it is generally much more accepted."
There's a lot of stigma surrounding a premarital agreement, but there really shouldn't be. "In fact, some states (like California) will provide one for you, even if you don't draft a prenup yourself," says Freeman. "Determine what your state applies to your marriage automatically, then ask yourselves: Are you sure you want this generic document to dictate what happens to you, or would you rather have the opportunity to discuss and draft an agreement that you are both more comfortable with?"
If your partner is asking for a premarital agreement, do your research to find out what protections you would have under the law, and make sure they're included as a bare minimum.
"If one spouse stops working to take care of children, their career and earning capacity can diminish, which can affect things like spousal support if there is a divorce later," says Mazzei. "A prenup can address what happens in that case, pre-determining things like the amount and duration of support."
Are you a business owner? If your business appreciates after your marriage due to your partner's efforts, they can have a claim to any profits. "Many business owners choose to address this in their prenup by specifying that the business will remain the owner's separate property," Mazzei concludes.
We know talking about a prenup can be hard, but if you think you'd like to have one, Mazzei and Freeman have a few tips. "Your premarital agreement should never be an ultimatum," says Freeman. "Telling your partner that they have to sign or you won't get married is no way to enter into a relationship!"
Instead, start a discussion with your lawyers six to 12 months before your wedding. This will give you time to negotiate, as well as allow your lawyers to help demystify the document and explain why it can be valuable, even if it seems intimidating. "It's an opportunity to create transparency about how you plan to handle future finances, accounts, homeownership, and investments," says Freeman.
"For a truly successful discussion, start it early instead of waiting until you're neck-deep in wedding planning," says Mazzei. "By discussing a premarital agreement early on, you will be able to have a discussion without the pressure of your impending wedding."
Treat the whole conversation as an opportunity to express your desires and expectations. Even if you don't end up signing anything, you'll have more clarity and transparency within your relationship, and will begin to feel more comfortable addressing tough topics openly and honestly.