Whether your wedding plans have been delayed by the virus or your big date is quickly approaching, now is the time to lay down financial plans and boundaries. One way to accomplish this is through a prenuptial agreement. Not just for the rich, this legal document can protect you in the event of a divorce, and encourage an open conversation about money management before you tie the knot. Still, there are some important mistakes to avoid when drafting your prenup. 

1. Being Afraid to Bring It Up

When it comes to romantic gestures, discussions about prenuptial agreements are likely the last thing to come to mind. You may even view such discussions as a threat to your impending marriage. Rest assured that a prenuptial agreement is unlikely to be the reason a would-be marriage ends. Instead, it is far more plausible to assume that the parties reached an impasse and realized they were financially incompatible. While such a discovery could be painful, it may also save you from years of heartache and a financially devastating divorce. 

Completing a prenup before your marriage could also protect your marriage from one the leading causes of divorce: arguments over financial matters. Unlike those who do not take the initiative to discuss money before marriage, you and your partner will have an agreement—a clear path to reach and achieve your agreed-upon financial goals. You will also have communicated through a highly complex document, which can further safeguard your marriage against a future divorce. 

Prenuptial agreements are not just for the rich. Instead, there are several scenarios in which this legal document can protect the vested parties in a possible divorce. Learn more by checking out these six situations in which a prenuptial agreement may be in your best interest. 

1. When Either Party Has a Considerable Amount of Wealth

Possession of a considerable amount of wealth is one of the most common reasons that couples choose to enter into a prenuptial agreement before marriage. Entering into this legal agreement before marrying lets you clearly define the rules for how wealth will be distributed in the event of a divorce. This rule also applies if one party earns more than the other at their job. 

2. If Either Party Owns a Business

If either you or your spouse owns a business, you may want to consider a prenup before getting married. Not only can this legal document protect your business and allow for proper allocation of its assets in the event of a divorce, but it can also define parameters on business operations and liability during the course of your marriage. 

People do not typically marry with the intention of one day divorcing, but those who have already experienced a failed marriage may be even more adamant to grow old with their new partner. Sadly, the risk of divorce is significantly higher for subsequent marriages. As such, it is highly recommended that parties take proactive steps to protect their assets in a second marriage. Learn more about how a prenuptial agreement can help you do this, and discover how our seasoned family law attorneys can help. 

Know Your Wealth and Assets

Just as it is critical to know your wealth and assets in a divorce, you should know them going into a marriage. Not only does this give you a base to work from in the event of a divorce, but it also enables you to effectively and proactively protect your wealth, long before a divorce occurs. 

Never Enter a Second Marriage Without a Prenuptial Agreement

If you did not sign a prenuptial agreement before your first marriage, it is likely you know just how messy dividing assets in a divorce can be. When you add in the fact that may divorcees also have children from their previous marriage, perhaps even child support and spousal support obligations, the importance of protecting one’s assets in a second marriage becomes even more crucial. One of the most effective ways to do this is to ensure you have a sound and concise prenuptial agreement before you marry a second time. 

Prenuptial agreements often carry a negative connotation. Yet, when one examines the details of some of the nation’s biggest divorces, the importance of a prenup becomes clear. Millennials are starting to change the way that we see them (they are signing these documents at an unprecedented rate), but maybe more can be done to help people see them for the useful tool that they are. One financial expert recently suggested that couples use it as a financial planning tool. 

Step One: Consider Your Current Situation and Future Goals 

If you are considering a prenuptial agreement, chances are, you already know you will one day be successful in business or money. Perhaps you have a knack for sales and have just made stockbroker. Maybe you see just how hard your spouse is working in medical school, and you are certain that they will be a successful physician. In either case, you envision a future that involves at least some measure of wealth. 

Rather than simply let that vision go to waste, use it to create a vibrant picture of your financial future. Set goals and milestones for achieving certain tasks, such as paying off your student loan debt or purchasing your first commercial property. Now take it one step further and consider how you want to spend your money, day-to-day. Would you rather invest? Are you interested in procuring certain assets? Do you want to donate a certain percentage of your earnings to a charity each year or quarter? In short, attempt to consider every element of your future wealth and then use it as a framework to prepare for the next steps. 

Data suggests that more couples are signing prenuptial agreements before getting married, which could be a good thing, as data suggests that couples are less likely to divorce when they have one in place. However, those that have one already may need to review their documents, come 2019. 

How the New Tax Law is Expected to Impact Existing Prenuptial Agreements 

The new tax law, set to go into effect on January 1, 2019, is expected to impact both married and divorcing couples in a significant way. For those going through a divorce, it may affect alimony payments—both in amount and how willing a party is to make them. It is this aspect of the new law that also affects prenuptial agreements. 

For the past 70 years, alimony payments have been tax-deductible for the payor and taxed as income for receivers. The new tax law eliminates this element of divorce law. Sadly, this change is expected to leave less money for the family, as a whole. Without the tax benefit, payers may have less discretionary spending money than their spouses. The courts have to balance this out by reducing the alimony payment amount, so even though the receiving party may not have to report the payments as taxable income, they may ultimately receive less money. Neither party benefits from this, unfortunately, but the change is inevitable.