Although some same-sex couples may not want to admit it, divorce may be on the horizon for them. It’s the unfortunate reality in today’s world. With ambiguous laws and some states still not realizing certain types of civil unions, the division of assets could be much hazier when it comes to same-sex couples separating. If you are getting ready to tie the knot or enter into a partnership, it may be a good time to consider obtaining a prenuptial or postnuptial agreement to protect your assets.
Prenuptial vs. Postnuptial Agreements
A prenuptial agreement – or “prenup” – is a contract agreed upon before marriage that defines – how assets will be allocated in the event of a divorce. Prenups may also detail how assets will be distributed upon the death of a spouse, which is especially helpful if one or both partners are bringing children from previous relationships into the marriage.
A postnuptial agreement – or “postnup” – is a contract entered into after the wedding that delineates the separation of assets in case of a divorce. While it is very similar to a prenup, postnups are very different because the moment you say “I do,” many assets turn into marital property. Instead of being able to specify separate assets clearly, postnups must deal with that fact, often making them less reliable – and harder to enforce – in court.
Candidates for Prenups and Postnups
There’s no doubt that a legal contract that discusses divorce before or after marriage is unromantic and unappealing. For the right person, though, an agreement may save a lot of headaches (and heartache) in the long run.
You should consider a prenup or postnup if one of the following pertains to you:
• You have substantial assets. Whether you own all or part of a business, or have simply been fiscally responsible, a prenup could protect your hard-earned wealth.
• You are going to receive a sizable inheritance. If you want to ensure that your family’s estate remains within your family, a prenup or postnup might help.
• It is not your first marriage. If you have assets – and especially children – from a previous marriage, then you may want to guarantee that your money goes where you want it to go.
• One partner plans to leave the workforce to care for children. If you plan on staying home to care for children, you may want to make sure that you are compensated for this professional hiatus if you and your partner split.
• One partner has been unfaithful. It may sound cold or harsh, but getting an unfaithful partner to sign an agreement may be a way to gauge how serious he or she is about working on the relationship long-term.
• You are not legally married. If you have decided to enter into a civil union or domestic partnership, you can still obtain a prenup or postnup. A legal contract is not restricted to those who are getting married. In fact, since many states do not recognize unions and partnerships, it’s particularly crucial to get an agreement in writing that defines assets if there is a breakup down the road.
Prenups & Postnups for Same-sex Couples: The Security Is Worth It
While there are no guarantees or certainties when it comes to what will happen in court, especially if your agreement contains unclear wording, a legal contract may save you time, fighting, and money if you and your partner decide to separate. If you want to wait until after you say “I do” to form an agreement, check the laws in your state regarding postnuptial contracts. You may be better off getting a prenup if you haven’t already tied the knot or entered into a union.
If this is your first marriage or union and you aren’t bringing any assets into the relationship, then a prenup or postnup may not be for you. As always, it’s a good idea to consult a professional before making any final decisions.
A conversation about divorce may seem awkward and uncomfortable right now, but it’s probably better to have it now than later – when feelings are hurt or tempers are flaring. Every relationship has the potential to end. What will happen if your “I do” turns into “I don’t”?
Check out my blog at http://partnershipwm.com/resources/blog/ for more information like this. We are not attorneys and this should not be considered legal advice. The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.
- Throughout my nearly 20 years as a Financial Advisor, I have seen some of the best and worst markets in our history. That experience allows me to approach my clients with the knowledge of how the markets fit into their greater financial picture. At Partnership Wealth Management we help everyday people who have accumulated wealth make sense of what they have and work with them to maximize their financial opportunities in a relaxed, comfortable, and professional environment. While we help people from all walks of life, many of our clients are same-sex couples searching for a knowledgeable, LGBT-friendly financial advisor to help them with their unique financial planning needs. I am a CERTIFIED FINANCIAL PLANNER™ professional and have the Accredited Domestic Partnership Advisor(sm) designation. As a Registered Investment Advisor, we are not tied to any company’s investment products allowing us to provide unbiased advice by offering a wide array of investments and other products to our clients. Since 2001, I have been writing articles on financial planning for several regional newspapers and have been a guest speaker on LGBT financial issues for various local and national organizations. Additionally, I have conducted financial planning workshops for large corporations and government agencies. Non-Profit Work I believe that it is important to give back to the community and currently serve as the treasurer for FreeState Justice and as a co-founder/president of Paws for a Cause. I’m a current member of several LBGT, environmental, and local community groups. Personal My wife, Heidi and I enjoy camping, hiking, and traveling with our daughter, Elise, and our dogs, Fenway & Roxy. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.