Valentine’s Day, a day synonymous with love, chocolate, and prenuptial agreements? That can’t be right. How could a day so sacred amongst romantics and dreamers be accompanied by such doom and gloom, and dare I say it, practicality? According to a CNN Money article, in New York, Illinois, and California, February begins the busiest month of the year for divorce filings. With almost one out of every two marriages ending in divorce, it seems only reasonable that this Valentine’s Day, you should build a safety net, should the metaphorical bungee cord of marriage break. Don’t be afraid to slip a signed Prenup under that bouquet of flowers and box of chocolates this Valentine’s Day to avoid future hassle and financial uncertainty.
A Prenuptial Agreement is a written contract entered into before marriage, defining the obligations of both parties should divorce, separation, annulment, or death occur. The end of a marriage is inevitable, whether it in divorce, a statistic the CDC places at roughly 50%, or death, which 100% of the time will terminate a marriage. A Prenup guides who owns which assets, how those assets are divided, which assets are joint property, and the rights and obligations of each party. It also addresses other important issue such as child support, alimony, and provisions of inheritance.
Here are 5 reasons why you need a Prenup this Valentine’s Day:
- Both Parties Lay Their Cards on the Table: Think of a Prenup as a full reveal, where you and your partner both flip over your cards to disclose everything that could be contentious should divorce or death occur. A Prenup compels upfront, honest communication to discuss future issues that may not be approached in an amicable matter when face to face with your ex-partner and their new catch in an attorney’s office. Potential deal-breakers can be addressed and resolved, and you and your significant other can start happily-ever-after with no surprises or skeletons in your closet.
- One Party is Financially Better Off: When one party’s income or net worth far exceeds the other’s, a Prenup can help protect its corpus, ensuring when the relationship is irretrievably broken, you aren’t giving away half your net worth to your ex. Unfortunately, not every marriage is entered into with the honest and good intentions, as we have seen with various celebrity marriages that have ended with one spouse paying out an arm and a leg after only just a few years of marriage. Or maybe you have stopped working in order to take care of your children full time. After years of staying home preparing school lunches and dusting vases, you could find it difficult getting back into the working world. A Prenup provides the support you will need while you dust off that resume and get back into the office to become financially self-sufficient again.
- One Party is Neck Deep in Debt: For all you know, the spouse of your dreams has been accumulating massive amounts of credit card debt throughout your relationship, and you’ve failed to find the shoeboxes of receipts piled up under your bed. Without a Prenup, you could end up liable for accumulated debt that could potentially cripple your chance at a financially stable future. A Prenup enables you and your partner to address your financial savings, investments, debts, and how such debts should be paid off.
- One Party Owns Their Own Business: If you are a business owner, you risk having your ex-spouse inherit business assets, or even worse, getting a share of the business itself. This could be especially detrimental when a family business is involved, or your ex-spouse has no previous business experience, causing aggravation and dissonance amongst family members and business partners. A Prenup can help keep your financial stake in a business separate and out of the reach of your ex-spouse.
- There Are Kids Involved: Maybe you are bringing in children from a previous marriage or simply want to make sure your assets pass to your children. Either way, you will need to take into account how you and your children will be provided for should divorce or death occur. A Prenup can help decide how the children will be supported, educated, and what family assets they are entitled to inherit.
Famous Couples Who Didn’t Execute a Prenup:
Although not everyone has amassed a fortune to the scale of most celebrities, you still risk having a large percentage of your financial assets and net worth divided by court guidelines, which are unforgiving and calculated. Don’t end up like these celebrities who ditched the Prenup in favor of the belief their marriage was a “sure thing.”
- Mel Gibson and Robyn Moore: After accumulating a net worth exceeding $900 million USD, Mel Gibson and his ex, Robyn Moore, divorced, with the resulting payout in excess of $425 million USD, or half of Gibson’s net worth.
- Paul McCartney and Heather Mills: Paul McCartney and ex-wife Heather Mills 2008 divorce ended up in an almost $49-million-dollar settlement for Mills, more than $200 million lower than originally requested.
- Guy Ritchie and Madonna: After nearly eight years of marriage, pop Icon, Madonna, and British filmmaker, Guy Ritchie, called it quits. With no Prenup in site, it is rumored Ritchie received between $76 and $92 million, about 20% of Madonna’s net worth, for their brief marriage.
When Are Prenups Most Critical:
In sum, Prenups are not mandatory, but strongly advised. Nobody ever wants to believe their marriage will fail or end in tempestuous disagreement, but the harsh reality is it is occurring more often than ever, so make sure you protect yourself and your loved ones from financial uncertainty and despair. If you are in one of the following categories, you especially should consider executing a Prenup this Valentine’s Day.
(1) Parties marrying for a 2nd or 3rd time
(2) Parties who have an established financial portfolio
(3) Parties who have children from a previous marriage
(4) Parties who have an interest in a business or stand to receive a large inheritance
Diamonds are forever, but often, marriage is not. Start this Valentine’s Day off properly, ensuring you and your loved ones are provided for financially. After all, nothing says “I love you,” quite like a Prenup.