Tying the Financial Knot

Whether you’re getting married for the first time or are getting remarried, a wedding is a good time to review your financial plan. If you have significant assets, or dependents, you may also want to consider developing a prenuptial agreement and updating your estate plan.

Prenuptial agreements. It may seem unromantic to bring up a prenuptial agreement, but it’s best to get the process started well before your wedding day. The process of creating a prenup will give you and your partner an opportunity to discuss your finances openly, honestly and in detail—and build a strong foundation for the financial side of your relationship.

The groundwork of a prenuptial agreement begins with you and your spouse-to-be making detailed lists of your assets and debts. Each partner should determine which assets they’d like to retain sole ownership of, and which should be held jointly. The latter assets will be considered marital property and will likely be divided as such in a divorce.

You can also earmark debt in the agreement. If one person is entering the marriage with substantial credit card or student loan debt, you may decide that person would be solely responsible for their remaining debt should you separate. Another discussion centers on the terms of the agreement itself. Should it be in effect indefinitely or only for a certain number of years? Should the agreement have clauses for things like infidelity? It should also address the conditions under which alimony would be awarded.

If you decide on creating a prenuptial agreement, it’s crucial that you and your fiancé consult separate attorneys who have each of your best interests in mind. They will help you come to an agreement you both feel good about. If you don’t have an attorney, ask your Wealth Advisor for a recommendation.

Second marriages and beyond. If this isn’t your first marriage and you have children from a previous marriage, it’s important to update your will and estate plan to make sure your children inherit the property you want for them. And you likely want to update other documents to keep an ex-spouse from being in charge of your health-care decisions if you become incapacitated. Also, review your will, powers of attorney and beneficiaries on any financial accounts and insurance policies to ensure they reflect your current wishes.

If you have children from a previous relationship, consider putting some of your assets into a trust for them. You can structure the trust so that your spouse has access to your assets (with certain conditions built in, if desired) after your death, and any remaining assets pass to your children after your spouse’s death. But that’s just one option. An estate attorney can help you structure a trust to suit your goals and preferences.

Regardless of what you choose, having a plan and getting it in writing can give you and your spouse-to-be the peace of mind to focus on enjoying the new life you’re starting together.