Marriage and divorce are the most important financial transaction in anyone’s lifetime. A contemporary man or woman needs to be informed about both of them. Divorce is the only business deal that puts everything that a couple owns or earns on the table.
In a prenuptial agreement, you will negotiate the financial terms of your marriage and each partner’s role before saying the vows. Financial issues include:
1. Earnings and bill paying
2. Career goals
3. Short and long term financial goals.
4. Estate planning in the event of death or divorce
6. How income taxes will be paid
7. Who will pay to defend a tax audit
8. Who will pay for specific expenses and obligations in a divorce. Certain levels of divorce may be promised after a certain number of years of marriage, or perhaps a percentage of income may be shared per an agreed-upon-formula.
9. How the pension will be shared. You can’t waive the rights to pension benefits if you are not married, so this may require a post-nuptial agreement in which you waive the pension rights in lieu of some other asset.
Prenuptial agreements can and are held up in court when there is a divorce. Ask New York Giants football star Michael Strahan. He was recently ordered by the judge to pay his ex-wife $15.3 million which represented more than half of his net worth as well as 20% of his yearly income from each year they were married. She went to court to have the agreement enforced. In Saturday’s New York Post she said “It pays to tell the truth. I never asked for a penny more than the pre that Michael and his lawyers wrote and made me sign. And all I ever asked for was that it be upheld.” And so her pretial agreement worked and was enforcable.
Learn more about prenuptial agreements that work or don’t work when getting a divorce in Chapter 11 of Kathleen Miller’s book Fair Share Divorce for Women.