• 19
  • January
    2012

The head versus the heart: is it really unromantic to discuss prenuptial agreements? Recent high profile divorces remind us that the wealthy have their own problems with post-marital division of property. Katy Perry, for example, could lose half of her fortune to a marriage that lasted a year.

Their experience teaches the rest of us some valuable lessons.

When the heart governs prenuptial behaviors, the economic partnership is ignored, financially protective ground rules never established. Would you work for a month and then ask how much your paycheck is? There are certain financial facts we all should understand out of the need to be economically stable.

Marital disharmony often begins with one of two topics: children or money. The dating and engagement period exist to negotiate these issues; yet, very few couples actually formalize the discussion. Whether Perry and Brand ever even discussed a prenuptial agreement has not been confirmed. We do know, however, that they don't have one, and that means that Brand could get about $20 million in the divorce.

People tend to believe their own family history, rituals and financial management are the norm. They expect everyone operates in the same fashion. This universal self-deception leads to the discomfort in discussing truly fundamental strategies like economics or family planning.

The wedding event generally garners a more in-depth conversation than the marriage plan. Half of all marriages end in divorce. Logically, more than half suffer from poor planning and miscommunications. Of course, the toughest conversation of all regards exit strategies, including property division.

When two people marry, they form a third entity, the marriage. However, they remain two individuals as well. Each individual needs to protect themselves to some degree, especially if one is far wealthier than the other.

You will discuss these issues at some point. Why not prior to the wedding? Whether you negotiate a formal prenuptial agreement or just hash out a "business" plan, discover what areas of agreement and disagreement exist, and how they are to be nurtured or resolved.

The head or the heart: you're going to need them both.

Source

Forbes: "Putting Romance Before Pre-Nup Put Katy Perry's Fortune at Risk," Victoria Pynchon, Jan. 18, 2012