Getting hitched? Avoid financial infidelity with these tips.
Financial concerns remain a top cause of divorce in the United States. In an attempt to help reduce arguments that are rooted in financial affairs, The Wall Street Journal recently ran an article focusing on some discussions that couples should have prior to tying the knot.
Some key points within the article included:
- Discussing debt. The amount of debt carried by each couple has increased by over $30,000 in the past two decades. In 2010 each couple carried an average of $89,500. This figure includes mortgage debt and student loans. When adjusted to reflect 2010 dollars, each couple in 1989 carried an equivalent of approximately $53,700. Each individual should take the time to address the debt that he or she brings into the relationship.
- Saving together. Once these debts are unveiled and discussed, a couple should develop a budget. Part of this budget should include not only a plan to pay off the debt but also a plan to establish savings.
- Planning for retirement. Saving for retirement while young doesn’t just provide ease of mind, it makes financial sense. Money put in 401K and other accounts grows over the years. A small amount now could lead to a big payoff in forty years.
Additional comfort can be found in the drafting of a prenuptial agreement, also referred to as premarital agreements. These legal contracts allow each individual to define who will take responsibility of property and other assets, such as debt, in the event the marriage was to fail. In order to be effective, the agreements must adhere to the rules established by state law.
Indiana law and prenuptial agreements
Prenuptial agreements are supported in Indiana under the Uniform Premarital Agreement Act. This law states that a properly executed agreement between prospective spouses will become effective upon marriage. In order to qualify, some requirements include:
- The agreement must be in writing.
- Both parties must sign the agreement.
In addition to controlling the distribution of assets, this agreement can also address the issue of spousal support. The provision may not be enforceable if the spousal support provision would result in extreme hardship due to circumstances that were not foreseeable at the time the agreement was executed. In these instances, the court may require a spouse to provide support necessary to avoid undue hardship.
These documents are particularly useful for those entering a second marriage. If children are present from the first marriage, the document can help serve to distribute assets in a manner similar to an estate plan.
Additional comfort can be gained from the fact that the agreement is not set in stone. Couples can change or revoke the agreement at any time by providing a written, signed agreement.
In order to put together an agreement that meets your needs and will withstand judicial scrutiny, it is wise to contact an experienced Indiana prenuptial agreement attorney.