Q: "I'm getting married and I have some assets of my own from my family. I'd like a prenup but my fiancé is insulted. How can I convince him this is a good idea?"
A: Emphasize to your fiancé that it is important for couples to have healthy discussions and agreements about finances before they get married as well as after they get married.
A prenuptial agreement can be a positive communication tool to clarify how assets will be treated in the future, especially family owned assets like farms or businesses.
Your Money Team would like to highlight two major points about prenups:
1) Whether or not you draw up a formal document, all couples should have full disclosure and conversation about finances before they get married, especially where children from prior marriages or family owned assets are involved; and
2) Prenups are not just for divorce, but also issues pertaining to death.
Full disclosure prior to marriage. Kim Stamatelos, a mediator and family attorney in Des Moines admits that the word prenup “conjures up intense emotions, insecurities, and confusion for many couples.” Yet by facing this tough issue, she says, couples can clear up misunderstandings and set the stage for open communication in their marriage.
Stamatelos encourages couples to think of prenups as a positive and healthy precedent for being candid and honest with financial issues and sharing attitudes towards money.
Jim Niblock, a tax and estate planning attorney with Brown Winick Law Firm in Des Moines, says that while prenups are more common in second marriages where there are children from prior marriages, they can be “positive for all couples.”
He notes that when assets like family farms or business interests are involved, it is important to “be clear in advance” if those will remain family assets in the event of divorce or death.
Nibock says you don’t necessarily always need a “full-blown prenup,” but might simply address the family owned assets.
Prenups deal with estate issues. Both Stamatelos and Niblock stress that Iowa currently does not recognize “post-nups,” agreements entered into after marriage (unlike California, which does recognize post-nups). Stamatelos says that if you don’t use a prenup, you could have difficulty directing the distribution of your money and assets with your will.
”Without a prenup waiving the right, your spouse has the right in Iowa to ‘elect against the will’ if you don’t give them a minimum amount of assets in your will,” says Stamatelos.
This can be an issue especially where there are children from a prior marriage. Niblock added that this issue is also important with regard to the use of trusts for assets, such as real estate, in which a spouse may have significant rights under Iowa law.
Involve a professional. If you are hesitant to bring up the subject on your own, consider including an experienced lawyer or mediator. These experienced professionals can help lead the conversation in a neutral, objective, non-intimidating manner and help both parties address critical financial issues prior to marriage.
From the Des Moines Register.