Tuesday, July 6, 2010

Prenuptial agreements: Not a do-it-yourself project

If you are Sixty and Single, but in a committed relationship that could lead to marriage, you most likely are considering a prenuptial agreement before tying the knot. The Wall Street Journal reports today that baby boomers, especially those over 50, are turning to prenuptial agreements before remarrying.
The newspaper said boomers are more likely to marry multiple times than generations ahead of them or behind them. That's because we are more likely to have gotten divorced. Citing 2004 Census data, the newspaper reported that almost 40 percent of boomers who have been married have gone through at least one divorce, while only about 30 percent of all people who have been married have been divorced.
By their 50th birthday, 27 percent of boomers have moved on to their second or third marriage. With that in mind, those of us 60 and older have many reasons for looking into a prenup including a working lifetime of accumulated assets, grown children with children of their own, potential inheritance from aging parents and separate businesses and real estate holdings. In addtion, the past two years of financial crisis have eroded our retirement nest eggs and reduced the equity in our real estate, which makes us more determined to hold onto what's left. Attorneys and CPAs will charge about what a new will might cost to write up a prenup. It is not a do-it-yourself project, experts say. You and your future spouse should hire separate attorneys. "The best prenuptial agreement is one that protects the interests of both spouses without causing mistrust," , says 360 Financial Literacy, a online Web page sponsored by the National Institute of Certified Public Accountants.
Below Journal researchers provide a list of do's and don't's when it comes to prenups.
Here are their pointers:
- Have each party represented by a lawyer.

-Start talking about and drafting the agreement several months before the wedding.

- Consider enlisting the help of a marriage counselor, financial planner or accountant.

- Research whether an additional waiver is needed for a workplace retirement plan.

- Hide any assets from a future spouse.

- Forget to assign responsibility for joint and separate debts, if applicable.

- Include things that could violate state laws, such as child-support payments.

- Use a prenup as a substitute for a will or estate plan.
For more resouces on prenuptial agreements:
http://www.nolo.com/ - an prenup overview.
360 Financial Literacy - the basics of a prenup.
Bankrate.com - everything you need to know about a prenup.

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