Using a third party to take the lead when talking about money will greatly help keep the peace in your marriage. – Rachael Pace.
Many soon-to-be-married couples fail to have discussions about their finances before marriage. A shared conversation with a mediator or collaborative team about finances and a possible prenuptial agreement offers the couple an opportunity to discuss building a future based on mutual respect and understanding. Here are three reasons why soon-to-be-newlyweds may want to consider discussing a prenuptial agreement and make this part of their wedding planning.
First, many clients believe that a proposed prenuptial agreement suggests an expectation that the marriage will fail. That is not the case. A conversation about a prenuptial agreement allows each client to fully understand what each brings to the marriage – including all assets and debts and have a conversation without an obligation to agree.
Oregon law requires that prenuptial agreements generally be fair and balanced. When clients are trying to determine what is “fair” they may not initially agree – what is fair to one person is not necessarily fair to the other. However, it is more likely that the separate definitions of “fair” may align when you get along and plan for a wedding.
Also, a curious conversation about a Prenuptial Agreement does not create the agreement. A Prenuptial Agreement must be voluntary and in writing. A conversation, especially with a mediator or collaborative team, does not create a binding prenuptial agreement. (There could also be an agreement that the client asking for the conversation pay all fees associated with the discussion and any subsequent agreement.)
Second, for a prenuptial agreement to be valid in Oregon, both participants must understand the property at issue. For example, if one client owned a small business pre-marriage, that client would have been obligated to share all of the assets, especially all of the debts, associated with the business. It may be particularly relevant if the business carries significant debt – some of which might become shared debt if the marriage ends in divorce. The fiancé may appear to be running a successful business, but the books may tell a different story. A conversation about the business, its growth, income, debts, and trajectory may have allowed both clients to enter the marriage with a complete understanding of how the business is being run.
Third, many couples fail to have full discussions about their marriage roles. Each assumes that they either know their position or that the roles will become defined as time goes on. A conversation about a prenup allows the clients to share spending habits, whether to have joint or separate bank accounts, whether to have joint or separate credit cards, how and whether each will save for retirement, and how and whether each will save and support any children. Other conversations could have centered around their financial values. For example, are they both okay with risk, and if so, how much risk? Do they like to take on debt? Do they both want to store some of their monthly income for the future or save haphazardly? Some couples fail to have these initial conversations and then find that their financial expectations are incompatible – which is usually a reason marriages do not survive.
There is a benefit to having a shared conversation about finances with a mediator or a collaborative team before marriage. This conversation is an opportunity to build a strong foundation for the marital future and should be part of wedding planning.