For Richer, for Poorer; Prenups and the Modern Couple

Dear Darren,

The answer is maybe.

I don't mean to be wishy-washy, but the issue of a prenuptial agreement is a thorny one, so my answer is deliberately ambiguous.

Given what you've told me about your situation, I don't think you need a formal, legally binding prenup (which could easily cost you $1,000 or more). Your assets are your assets as long as they are registered in your name only; your spouse has no legal claim to your two investment accounts as long as you keep them separate. (Even in "community property" states, only assets acquired during the marriage are divided fifty-fifty.)

Even if you don't need or want a legal agreement; it's worth talking through the issues a prenuptial agreement represents before you tie the knot. So I think it's an excellent idea to sit down with your fiancee and hash out how you'll deal with the financial aspects of your relationship.

Start with the basics. What assets are each of you bringing to the relationship? How do you envision managing your money? Will you pool resources completely or create a joint account for joint expenses and retain individual accounts for personal ones? What are your appetites for risk? Who's the spender and who's the saver? Even the most compatible of partners can have very different views about money, and it's important to air those views before you get into a fight about investing in a hot stock or using the credit card for an expensive vacation. You don't need to agree completely on every matter, but a degree of clarity and common ground will go a long way to building a trusting relationship.

There are, of course, specific situations where a prenup is warranted. The classic one is if you or your partner is entering the marriage with significant assets or if you have wildly different net worths. But a prenup can also be a good idea if your fiancee has children (she might want to ensure her existing assets go to them), if either of you has equity in a family-owned company, or if either of you has significant debts. (Note that a good estate plan can also address some of these concerns.)

But if none of these situations applies to your relationship, a legal prenup may not be necessary. The ultimate goal is for you and your fiancee to create your own sense of trust and confidence about financial matters and aspirations. So by all means, have a conversation about moneyóand don't wait until the week before your wedding.

(1105-9420)