Why should a couple aged 50 or older consider a prenup? Are there any reasons why they shouldn’t consider this?
A prenuptial agreement can be particularly beneficial for older couples because they often have more significant assets, prior marriages, and children whose inheritance needs to be protected. Also, they may have retirement funds and pensions which could become complicated in the event of a divorce.
However, there may also be reasons not to get a prenup. If the couple doesn’t have significant assets, the cost and time of creating a prenup might outweigh the benefits. Also, if one or both partners feel the prenup creates an atmosphere of mistrust or negativity, they may prefer not to have one.
What are some of the biggest misconceptions about prenups, and how would you address those myths?
One common misconception is that prenups are only for the wealthy. While it’s true they’re particularly useful for protecting large assets, they can also help any couple by clarifying financial expectations and responsibilities.
Another myth is that discussing a prenup means anticipating divorce. But it’s more about being prepared for all eventualities – much like life insurance doesn’t mean you’re expecting to die soon.
Do you have any advice on how one partner can tactfully bring up the idea of getting a prenup to their betrothed?
Honesty and openness are key. It’s important to explain that it’s not about lack of trust or love, but rather about planning and preparing for all potential future scenarios. It can be helpful to frame the conversation around the protection of both parties rather than just one.
What are some pitfalls older couples might face if they decide not to get a prenup?
As I like to say, “Everyone has a prenup! It’s just a matter of if you want to rely on the state’s laws or if you want to draft your own.”
Without a prenup, assets could be divided according to state law rather than the couple’s wishes. This could be problematic for older couples, especially if one or both partners have children from previous marriages, as it may result in those children not receiving their intended inheritance.
What key elements should be included in a prenup to ensure its effectiveness and enforceability?
A few key elements for a prenup include:
- A full and fair disclosure of all assets, debts, and income.
- Provisions for division of property in the event of divorce or death.
- Provisions for spousal support.
- The document should be executed voluntarily and without coercion.
- Both parties should have independent legal counsel or have had the opportunity to seek it.
Are there any state-specific requirements or laws that couples should know when getting a prenup?
Yes, prenup laws can vary by state, especially in community property states versus equitable distribution states. It’s always a good idea to consult with a local attorney to understand specific state laws.
What should couples expect regarding costs when seeking legal advice and assistance for creating a prenup?
Costs can vary widely based on the complexity of the couple’s finances and the rates of the attorneys involved. On average, prenuptial agreements in the U.S. can range from $1,200 to $2,500 per partner.
However, keep in mind that is the average across the entire United States. In higher cost-of-living areas, you can expect to pay significantly more.
In metropolitan areas, expenses can be upwards of $10,000.
Have you seen any notable trends or changes in attitudes toward prenuptial agreements recently?
Recent trends show an increase in the number of couples seeking prenuptial agreements. They’re becoming more accepted and less stigmatized, and are increasingly seen as a smart financial planning tool.
Is there anything I didn’t ask that’s important to note when discussing prenups?
It’s important to remember that a prenup can be customized to fit the unique circumstances of the couple. It’s not a one-size-fits-all document, but rather a flexible tool to ensure that both parties’ interests are protected.
Meet the Contributor
Zack Swad, financial planner located in Santa Rosa, CA
Zack Swad is a fee-only financial planner located in Santa Rosa, CA serving clients locally and across the country (virtually).
He specializes in financial planning and retirement planning for people age 50+. As a fee-only, fiduciary, and independent financial advisor, Zack Swad is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice. He has been in the finance industry for over 11 years. He previously worked for a Fortune 500 Financial Services company, managing a practice of $800 million for 300 clients. Zack then went on to build his own firm, Swad Wealth Management, LLC so he could make a deeper impact in his client’s lives. In his free time, Zack enjoys spending time with his wife Elise, playing board games, piano, and singing.
Zack Swad’s Contact Information:
Email – zack@swadwealth.com
Want to talk to Zack? Schedule a Call
Disclosures:
This commentary on this website reflects the personal opinions, viewpoints and analyses of the Swad Wealth Management, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Swad Wealth Management, LLC or performance returns of any Swad Wealth Management, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this article constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Swad Wealth Management, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
