Keeping Romance Alive in Premarital Planning

Each year, “proposal season” begins around Thanksgiving and ends on Valentine’s Day. Then the planning begins — the date, the venue, the guests — and, for many couples, a premarital agreement.

A premarital agreement is financial planning before marriage, and the process should be thoughtful and collaborative. As unromantic as it may sound, a premarital agreement is simply a contract between a couple made in anticipation of their marriage. This agreement can address financial obligations during the couple’s marriage and when their marriage ultimately ends, either by divorce or death.

Like many agreements, the purpose of a premarital agreement is to clearly state the parties’ intentions, expectations, and agreed obligations, and to change the “default” outcomes provided by law in the absence of an agreement. These agreements can address various financial matters, and a couple decides which of them to address:

• The treatment of property as the separate property of each party (including property owned prior to the marriage, gifts, and inheritances) or the marital property of the couple
• A marital account for expenses during the marriage
• The filing of income tax returns during the marriage jointly or separately
• The division of property and support payments, if any, in the event of divorce
• The intended disposition of property upon death during the marriage.

Premarital planning can and should be a constructive relationship-building process, not a difficult or divisive experience for a couple. We offer a few tips for a successful premarital planning experience:

Start early. U.S. couples are engaged, on average, for 15 months. That leaves plenty of time for premarital agreement planning. We strongly recommend that couples begin the process early to avoid unnecessary stress and haste. Some of the decisions that need to be made take time to think about and require more than one conversation between a couple and with their counsel.

Consider working with a “coach.” Working with a financial coach can be helpful. Money matters can be complicated for entirely non-financial reasons. How people feel about money, wealth, and financial decision-making impacts their premarital agreement planning experience. As lawyers, we know the law. We may be able to help with the emotions, but often a professional coach can be a tremendous resource.

Choose legal counsel whose approach to the process aligns with your expectations. Choosing the right attorney for both parties matters. Each party should hire an attorney they feel comfortable with and have confidence in. The attorneys set the tone for the negotiations. Know the approach your attorney takes. Some may be adversarial. Others more collaborative.

Talk about your financial expectations for your marriage. Communication is crucial. There is no substitute for direct communication between a couple about their financial expectations. Will finances be kept separate, or some combined and some kept separate? What standard of living (home, vacation home, travel) does the couple expect to maintain? Will both parties contribute to family expenses? Are there any family trusts or expected inheritances?

Finish well before the wedding day. Finally, finish early (which is dependent on starting early). Wedding planning is time-consuming, and the closer the wedding day, the more there is to do. Plan to meet with your attorneys to sign the premarital agreement well before the wedding day. Then, enjoy the rest of the journey.

The Levenfeld Pearlstein, LLC Trusts and Estates group is available to advise clients on premarital, gift, estate, and charitable planning. Contact Suzanne Shier or one of the other members of the group for more information.