5 things to keep in mind when negotiating a prenup

One of the best ways to eliminate any doubt when it comes to love and money is to negotiate a prenuptial agreement. Learn how.

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If you're on your way to living happily ever after it's important to make sure you get on the same money page as a couple before saying "I Do." One of the best ways to eliminate any doubt when it comes to love and money is to negotiate a prenuptial agreement before becoming man and wife.

Don't let your feelings get in the way of what's smart

Feelings about signing a prenup can be mixed: one person may feel they're protecting their assets while the other may harbor feelings towards malintentions. The truth is a prenup is just a business deal that comes with the bigger (and better) partnership of marriage.

Think about all your money, not just assets

A prenup can be so much more than just "what's mine is mine and what's yours is yours" says the New York Times. "All couples should make the time to talk about the big questions that prenups answer up front. Who is paying for what? How much do you save? Are you going to go back to work after you have children? What happens when one of us dies?"

Here are three things you should absolutely negotiate in a prenup:

The monthly expenses

If one spouse earns more money than the other it's important to determine how the monthly bills will be paid and who will be accountable for what. It's very rare that both people in a couple will have the same income. Assuming the spouse with the higher income will take care of all the bills can lead to misunderstandings and arguments. It's better to have a clear understanding of how each person will contribute to joint expenses.

Estate planning

The reality is that all marriages end, some end in divorce and others last until death do us part. Either way one spouse usually outlives the other and in that case arrangements need to be made. This is especially important if one of you had children before entering the marriage.

Sit down and talk with your spouse about how assets should be divided when one of you passes away, it ensures realistic expectations are set and also ensures final wishes are carried out.

Assets prior to the marriage

According to the Wall Street Journal, "In most jurisdictions, assets that one party owned at the time of marriage aren't subject to a claim by the other spouse in the event of divorce—but any increase in the value of those assets during the marriage may be subject to a claim."

This is the part of the discussion where each person has to have their individual best interest at heart. It doesn't mean you don't love or trust your spouse-to-be, it just means you're protecting your assets, inheritance and family heirlooms.

If you're presented with a prenuptial agreement—or thinking about drafting one—take the time to read and understand the purpose. Remember, don't be offended; just think of it as another box to check off on your To Do List before walking down the aisle.

Topics:
  • Financial Planning
  • Getting Married
  • Financial Planning
  • Getting Married
  • Financial Planning
  • Getting Married
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This article was written by Ginger Dean from Forbes and was licensed as an article reprint from April 5, 2016. Article copyright 2016 by Forbes.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917.
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