Saturday, October 6, 2007

Prenuptial agreement as financial planning toool - another article

Last month published No Prenup? Take These Steps. This came to my attention during my blogging hiatus and so bear with its tardiness. The article points out the advantages of formal agreements and some alternatives.

"Even the most optimistic people have to ask themselves, 'What financial shape would I be in if my marriage ended?'" says Marilyn Capelli, a financial adviser in Bloomfield Hills, Mich.

The most effective way for couples to button down their finances is through a prenuptial or postnuptial agreement. But many people are reluctant to even raise the possibility of drafting one because it seems so, well, out of sync with that bit about "till death do us part."

The California Divorce and Family Law Blog also published an article on prenuptial agreements while I was gone from my blog. Should marrying types have prenup? Yup has some good advice on what to do before speaking to an attorney:

Some prenup basics:

  • Before you sit down with lawyers, talk to your spouse about what you want to include in the prenup. There's a lot you can talk through when you're not getting billed by the hour.
  • You both need your own lawyers; you should not be represented by the same attorney. For a straightforward prenup, you might pay $1,500 each.
  • The prenup needs to be drawn up months before the wed ding, not days -- it's not something you slap together and sign in the car on the way to the ceremony. A shotgun prenup might not hold up in court.
  • Be honest. Concealment of any asset or debt can invalidate your prenup.
  • Everyone involved -- including the lawyers -- should sign the documents.
  • If you move to another state, have a local attorney review the agreement in order to see whether you need to make changes.
And some good reasons for a prenuptial agreement:

Why do couples need to address money issues early on? If you aren't in sync financially, there's little hope of sustaining a happy relationship. Here's what I suggest -- whether you're dating, married or remarried:

  • Hold on to your independence. No matter how long you've been together, keep at least one credit card in your name only. This enables you to maintain your own credit report and score; if you break up or are widowed, that makes it easier to start over.
  • Watch your property. It's not uncommon for women to enter a relationship with sizable assets of their own. You have every right to retain 100 percent ownership of anything acquired before your marriage.
  • Consider "for richer or poorer." Once you wed, you and your spouse are legally responsible for debts accrued during the marriage. Even if your guy seems as if he has his act together, don't as sume. Start by swapping your FICO credit scores ( Both of you should have good scores (at least 650), or you could be heading for serious stress.

I would suggest also taking a look at the other articles I have published on prenuptial agreements. There is a link to these other articles below. If you live in Indiana and are wanting a lawyer to prepare a prenuptial agreement, please contact me.

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