Tips for considering a prenuptial agreement

Although a prenuptial agreement can be a sensitive subject for engaged couples, taking care of potential problems up front can prevent hassle and arguments in the future.

• A prenuptial agreement is a contract between the soon-to-be married couple that deals with things like custody of children and the division of assets, including possessions, homes, stocks, retirement accounts, vehicles and checking accounts. A prenup is also helpful in determining how debt will be handled if a divorce or separation occurs.
• When is a prenup a good idea? If either party has vastly more wealth and possessions than the other, lawyers would generally advise a prenup to avoid a fight over money. The same advice would apply if both parties had a great deal of money.
• However, even the not so rich should consider a prenup. A prenuptial agreement can make a divorce less of a battle. It's a road map that details what will happen if the couple split up.
• Although prenups are sometimes challenged, creating an agreement will at least it sets a standard that can be helpful in the case of a challenge.

Both parties should sit down and have a frank discussion about divorce and separation. That doesn't sound like a very positive move for two people considering marriage, but it will help clear the air. Requesting a prenup can sometimes cause tension and suspicion. Discussing the issues can clear the way for a smoother marriage and eliminate fears and misconceptions. Below are some important issues to include in your discussion with your partner:

• What fears or reservations do each of the parties have concerning the prenup and divorce?
• Are both people satisfied with the terms of the prenup?
• Why does either party feel that a prenup is a good idea?

It's a good idea to involve a lawyer or other impartial third party to keep discussions on track.