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Most couples are advised to have a prenuptial agreement before they marry. This is an agreement about what would happen to their assets, just in case the marriage does not work out. Some people have a post nuptial agreement, because they don’t get around to creating a prenup before the wedding.
CNBC’s recent article, “Jeff and MacKenzie Bezos didn’t get a prenup—do you need one? Here’s what experts say,” explains that depending on how much you want to put into the agreement, it has the capacity to instruct how assets are going to be distributed upon divorce, how spousal support (alimony) is going to be distributed and it also will deal with the estate rights. However, what a prenup doesn’t address, is anything to do with kids. It can’t address custody or child support.
You may not believe it, but prenups aren’t just for the super-rich. They can be expensive. You should consider whether you have the level of assets to justify the cost.
If both spouses are bringing in about equal amounts to the marriage, a prenup may be less needed because it’s more of an equal playing field between both spouses. Nonetheless, it’s still a good idea to discuss it with an attorney.
If there’s a big disparity in income or assets, a prenup makes sense. There are other reasons to consider getting a prenup, such as if you own a business, are inheriting family money, had a prior marriage or you actively manage your assets.
If you had $1 million in an investment account when you got married and the account grew to $1.3 million during the time that you were married, that’s $300,000 that would be considered marital property in New York—like estate laws, divorce laws vary by state. Depending on where you live, that money might end up being divided between the two of you, even though it was earned because you originally had a $1 million account.
Although the topic of a prenup can be uncomfortable to raise, remember that marriage is a contract, and it’s a costly contract, if it doesn’t work out.
Engaged couples are not always eager to talk about prenups, thinking they imply a lack of trust or that they don’t expect the marriage to work out. However, married couples who are planning a life together need to be able to talk through difficult topics, negotiate successfully in a loving way and come to a resolution that meets the needs of both individuals. That’s a skill set that can take some people decades to develop—or a much shorter time, if it starts with working through their prenup.
Reference: CNBC (January 14, 2019) “Jeff and MacKenzie Bezos didn’t get a prenup—do you need one? Here’s what experts say”