The idea of creating a prenuptial marriage contract may sound unromantic but it is an idea that is quickly becoming quite common. The article draws an analogy between a seat belt and a marriage contract – you put one in place and hope you will never need it, but if you do, you’re glad it is there. At the very least, a discussion about a ‘love contract’ can help a couple communicate clearly about their financial situation, their financial goals and their approach to topics such as savings, spending, and debt. This can be an important preparation for marriage, since most marital disagreements are about finances.
In preparation for this discussion, and especially if the couple does not enter into a marriage contract, the article recommends making photocopies (or printouts) of all financial records (eg. bank accounts, investments, retirement, savings, loans etc), and establishing new savings and retirement plans for post-marriage monies. Keeping track of any payments made on a spouse’s debt is also recommended. At a minimum, three steps to create an enforceable marriage contract include: (a) don’t wait until the last minute to draft or sign a prenup as duress and stress close to the wedding date may invalidate the agreement; (b) be sure to hire separate representation for each party (paid for by each party separately); (c) beware of including penalties for fault (eg.
$50,000 for adultery) which may offend public policy, because divorce laws are now based on the public policy of ‘no fault’ marriage breakdown.
- Discussions in preparation for a marriage contract need not be adversarial but can be structured to enhance the ability of the couple to communicate about financial matters, thus strengthening the relationship of the couple.
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