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Pre and postnuptial agreements clear financial air

Some couples view prenuptial agreements as guarantee of a future divorce. That opinion is fading as more engaged couples seek out premarital agreements to solve money problems that could happen due to divorce or a partner's death.

What if a couple misses the prenuptial boat and wants to sign a financial contract with a partner after a wedding has already taken place? Postnuptial agreements, similar in every way to prenuptial contracts except for the exchange of wedding vows, are documents that help already married couples clear the hurdles of asset assignment and distribution.

Experts say there are several reasons why couples should consider a financial agreement. If a couple has accumulated significant wealth, it can be beneficial to the spouses to hammer out a contract.

Fiancées often cringe at the idea of discussing something as pragmatic as money before the day wedding. Married couples usually have the advantage of experience and may be more open to creating a financial plan.

Most couples, engaged or married, realize that divorce is a risk with every marriage. Mapping a financial route to clarify what's his and hers makes sense to couples who like to know what will happen "in case."

If disagreements over money are resolved before or early in marriage, the chances that finances will create spousal shock later become fewer.

Crafting a prenuptial or postnuptial agreement takes a willingness to compromise and can be costly. Spouses must hire separate legal and financial representatives to provide advice. Among the topics for spouses to consider are spousal debt loads, individual spending habits, hidden or undisclosed assets, existing estate plan documents and family expectations for asset distribution.

An accounting of real estate, investments, income, insurances, retirement plans and business values for both parties is necessary.

After a financial agreement is signed, the parties walk away with a new, clear knowledge of the things they own and can expect to have no matter what happens in the future.

Source: WMUR, "Is A Postnuptial Agreement Right For You?" Apr. 26, 2012

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