Most of us are never going to be multi-millionaires or social media influencers, but in reality, when you’re considering your second or even third marriage, chances are, you’ve accrued some stuff of value. Does a prenuptial agreement make sense?
Financial advisor Suze Orman says love can drown out any thought that a marriage won’t work. But the divorce rate in America for first marriages is 40 to 50 percent. About 60 percent of second marriages end in divorce. The average median length of a first marriage is 8 years.
“Hope is not a financial plan,” Orman says. Among other things, marriage is an economic contract. The time to plan for a divorce is before you want one.
Some financial advisors say not everyone needs a prenup, but before marriage, couples should know each other’s debt levels, discrepancies in each other’s wealth, and the possibility of inheritances. They should also review each other’s credit reports.
More than 36 percent of adults said prenups make smart financial sense, according to a recent Harris survey.
The International Academy of Matrimonial Lawyers advises future partners to consider the consequences of signing a prenup, which is now thought of as a financial planning tool.
Consider what could happen in 10, 15 or 20 years. If there is a chance you would walk away with little or nothing, think long and hard about whether you want to be married to this person.
Some prenups go into greater details, including adultery, frequency of intimacy, scheduling of housekeeping, and provisions for pets. It’s about sharing what’s important to each partner, even if it’s only about the right to an antique chair or who gets Fido.
These agreements help people feel secure in a relationship, and more importantly, allow you and your partner to – let’s be honest – hedge against what might seem unthinkable when you first fall in love.