First Comes Love, Then Prenup?

Honeymoon Haze

Some three years ago, when friends of mine learned that I was ready and wanting to tie the knot for the second time, they asked whether my spouse-to-be and I would enter a prenuptial agreement (note: in legal circles, a “prenup” is known as a marriage agreement or, for those not legally married, a cohabitation agreement).

My friends were simply looking out for my best interests, doing what they could to ensure that I was protecting myself. And I thoroughly appreciated their care and concern, knowing that while more than 40% of first marriages end in divorce, the percentage spikes to about 60% for second marriages, and even higher for those who venture into union a third time and beyond.

The thing is, the thought of a prenup hadn’t crossed my mind. The woman I was soon to marry was the kindest, most gentle soul I had ever known, my partner in laughter and joy, challenges and sorrow. And despite being genetically programmed to look at life through a pragmatists lens, my honeymoon brain could not fathom a scenario where not only would we divorce but she or I would be unfair toward each other in any way.

Ah yes, that unique specimen known as the honeymoon brain. You know, the one that’s been sprinkled with cupid’s dust, leading you to see your partner as perfectly sparkling. If they pick their nose, it’s cute. If they run a half-marathon, come home smelling like a skunk and opt not to shower, they’re adorable. You’re so ramped up on pleasure hormones that even the disco pop tunes they play every day at five o’clock while drinking a piña colada are filling your heart with warmth and desire.

At some point, however, the haze lifted. Owing to the persistent prodding of a lawyer friend of mine, my feet returned to solid ground and I patiently considered whether a prenup would be good for me. And I decided it wasn’t. Why? Well, being a guy who knows that conflict over finances is a primary cause of divorce, you would think I would minimize my own financial risk by having an agreement in place protecting assets I bring into the relationship. That said, while I knew all the reasons why a prenup would be beneficial for both of us, the romantic in me subdued the pragmatist. For better or worse, I just couldn’t come around to planning for divorce before we said our respective “I do”.

What Was I Thinking?

From the instant we’re born, we encounter risk. And some years after we enter this world, many of us choose not to walk this planet alone, taking a leap of faith in deciding to legally, emotionally, spiritually, and financially join our life with another person.

Ideally, from a financial risk management perspective, this decision isn’t made without input from a qualified family lawyer, financial advisor, and accountant. Of course, it’s not exactly shocking that such a team of experts does not play a large part, or any part, in the vast majority of impending nuptials.

Still, shouldn’t we at least give thought to the fact that marriage is the start of a business relationship as well as an emotional relationship? Isn’t it possible to discuss money, even to argue about money, and still love each other and bring romance to the wedding ceremony?

All In Favour

Agreed, prenups do not fall under any sub-genre of romance. Regardless, given the close to even odds of marriage ending in divorce, how could you not bring up the issue before the wedding date? A prenup is actually good for your marriage; it may even help sustain your marriage. How so? It will force you to openly discuss what assets each partner is bringing into the relationship, kinds of debts and how much, likely inheritance, saving and spending habits, and financial goals.

The prenup’s basic function is to protect each spouse’s pre-marital assets from a claim by the other spouse in the event of death or divorce. Specifically, a prenup may state exactly how much your partner will share in your pre-marital assets in the event of divorce or death (especially relevant to those with children from a prior marriage).

But that’s not its only function. The prenup may also protect assets acquired during marriage by setting a fixed amount for spousal support or eliminating spousal support altogether.

Considering that the median marrying age in North America is approaching 30, it’s more likely that those entering marriage for the first time are bringing assets with them and, just as importantly, debts. For those entering second and subsequent marriages, you likely have more assets, and possibly debt, than when you were younger, which is all the more reason to have a full discussion about what each of you are bringing to the table. The thinking being that, on divorce or death, the certainty provided by a prenup minimizes destructive arguments about entitlement to assets, as well as minimizing court proceedings and legal costs.

All Opposed

Discuss, discuss, discuss! Absolutely, you should discuss money and finances, what you have, what you owe, your spending patterns, values, and financial goals before vowing to spend your life by each other’s side. It would be foolish not to do so. But why the desire, why the need, to lawyer up and legal language your discussion such that you walk away with a formal contract that sets out ways in which one partner will withhold property from the other, a contract that moves love and trust to shaky ground, one that separates and undermines the marriage before it starts? Why an agreement focused on selfishness, on me, me, me, rather than WE? An agreement that weakens the union through imbalance of financial security? Do the two partners arrive at the table with the same hand? No. One will have less money, fewer assets, therefore less bargaining power. Should the other partner be determined to forge ahead, what is the one with less money to do? What can he/she do? Call off the wedding, destroy the marriage before it starts? Who plans for their divorce before they get married?!

Prenups Protect Both Partners

It’s not uncommon to believe that the wealthier partner is the one clamouring for a prenup. While this may be the case, a well-crafted prenup is designed to protect both partners. If you bring a whole lot of dough to the marriage and are used to living a certain lifestyle, you’ll want the agreement to specify how much you would owe to your spouse. And if you contribute to the marriage in non-financial ways, and are sacrificing a career to raise children or pursue other interests, then you want the agreement to spell out fair compensation for your contributions.

Valid And Enforceable

Like any other legally binding agreement, the enforceability of a prenup may be challenged if the terms are poorly drafted. Specifically, to ensure that the agreement is valid, you want to be sure of the following:

Each partner must have their own lawyer. If one partner is not represented by a qualified family lawyer, it’s possible that the agreement may be found invalid.

Each partner must volunteer to enter the agreement without any pressure to do so. Pressure may arise from economic dependency, physical threats, or threats to end the relationship.

There must be words in the agreement to the effect that both partners intend to create a legally enforceable agreement.

Full disclosure of all assets and liabilities.

The agreement must be reasonable, in writing, signed by both partners and witnessed.

To Prenup Or Not

It’s a personal decision whether or not a prenup is right for you. Should your marriage end in divorce, will a prenup minimize the anguish that typically goes hand out of hand in divorce proceedings? Possibly. Will it make for a more fair settlement of assets? Maybe. Overall, will it help or harm you and your spouse? That’s uncertain. The best I can say is you should both be on the same page on this issue. If you disagree, with one partner wanting the prenup and the other opposing, and are unable to find compromise, then for the peace and continuing existence of your relationship, it’s not worth it.

Ken Finkelstein, LL.B. J.D., www.buddhamoney.com.