Deciding whether or not to get married can be one of the most difficult decisions to make in life. Not only should one consider the love he or she has for the other person, but he or she should also contemplate the financial ramifications of marriage. First, getting married may be an effective way of building wealth. For example, through an employer-sponsored retirement plan, a couple can contribute $35,000 to a 401(k) retirement account whereas an individual is limited to $17,500 per year.
Second, a married couple can ensure the other spouse is protected in the event of death. Estate planning and some pensions can provide compensation to a surviving widow or widower. A portion of a deceased’s Social Security may also be recoverable.
Third, marriage often has consequences when it comes to debt management and other familial matters. Once married, creditors often may attach marital property to satisfy certain debts held by one of the spouses. Additionally, married couples place themselves in a position to receive financial support should a divorce occur. This may take the form of alimony and property division.
Though it may seem like a lot of financial issues hang in the balance when a marriage is entered into, the truth is a couple can lay these matters to rest before the marriage takes place. A prenuptial agreement can set out the financial parameters of each party and agreements between the parties regarding any financial matters they wish. These agreements may identify each party’s existing property, describe how pensions or retirement plans will be handled upon divorce, provide a waiver of alimony, and lay out how business assets will be handled.
Though many view prenuptial agreements as a sign of future divorce, the fact of the matter is these agreements help put marrying couples’ minds at ease by providing a fair fallback plan. A Massachusetts Family Law Attorney can sit with a couple to discuss the positives of creating a prenuptial agreement, and he or she can draft the document in a way that abides by the parties’ wishes.
Source: The Southern Business Journal, “Financial implications of marriage,” Scott McClatchey, Jan. 7, 2014