|CNN's Gerri Willis talks about when to say 'I do' to prenuptial agreement.|
NEW YORK (CNN/Money) -
The wedding bells are ringing. It's June, the busiest month for weddings.
In addition to the last-minute caterer, band and flower details, some couples are squeezing in some other arrangements -- legal ones. That's right, the P word: prenuptials.
Sounds like a downer, right? Negotiating prenups is not very romantic, but with statistics out there that have the divorce rate at 40 to 50 percent you're considered smart for signing one.
Before you say your vows, take today's five tips on whether or not a prenup is a good idea for you.
1. Lose the stereotype.
When you hear the word prenup, you might imagine it's for that mismatched couple. She has a trust fund, diamond earrings bigger than her engagement ring, and a yacht named after her. He grew up on the "other side of town" and put all his savings in her ring. Her father makes the ultimatum, "sign a prenup, then you can marry my daughter."
In another prenup gone too far, Caroline Krauss-Browne, an attorney in the matrimonial department at Blank Rome LLP, related a story about a prenuptial agreement where if the woman gained more than ten pounds during the marriage, her property rights would be cut back. But prenuptial agreements aren't just for the wealthy or the control freaks.
It's a smart idea for other couples too. In a second marriage, it can be the protection your children need to hang onto your property and their inheritance.
Arlene Dubin, a matrimonial lawyer in New York and author of "Prenups for Lovers," says that most states will give your spouse up to half of your estate after you die, leaving your children no say.
Speaking of family business, you might also consider a prenup if one of you has a stake in a family business. People who plan on getting advanced degrees may also want to sign on the dotted line, especially if you plan on specializing in medicine or opening a private practice, which would appreciate during the marriage.
2. Watch your retirement.
Prenuptial agreements aren't just about protecting current assets; they can protect your future too.
Dubin says that many people are surprised that retirement accounts are considered marital assets and are typically divided in case of divorce. These contracts can help couples manage their retirement accounts in a fair way.
In a prenuptial agreement, you and your spouse can also decide to keep your retirement assets separate. If you are not working or plan to leave the workforce, you may want to get a prenuptial agreement that would spell out exactly how much your working spouse will contribute to your retirement account.
3. Get your papers in order.
Financial disclosure is an important part of premarital agreements. It's up to you and your spouse to collect information on your income, debts and assets.
Sharon Sooho of DivorceNet says you should sit down with your accountant or financial planner to figure out exactly what value everything has. Then, sit down with your fiancee and figure out what you want your premarital agreement to do.
Prenuptial agreements can be just as broad or as narrow as the couple decides. Experts recommend that each person get their own lawyer. For those looking for more information, check out the American Bar Association (www.abanet.org), the American Academy of Matrimonial Lawyers (www.aaml.org) or DivorceNet (www.divorcenet.com). And remember, divorce laws vary across the country, so find out what applies in your state.
4. Procrastinators beware.
This is one wedding detail you'd better not procrastinate about. If the prenuptial agreement is not signed at least 30 days in advance of the wedding, a fiance could claim he or she was pressured to sign the agreement.
The entire prenup process can take up to a few months, so make sure that it's far enough away from the wedding so as to not interfere with the big day. Dubin says that as soon as the "M" word is mentioned, the "P" word should follow.
5. Skip it.
Prenups can cost between $2,000 and $20,000 according to Krauss-Browne. And you may not need to go through the expense of a prenuptial agreement to protect yourself in some cases. In most states, anything you owned before the marriage is separate property as long as you don't actively manage the property.
For example, if you have a bank account in your name and you don't make any deposits or withdrawals or actively manage your accounts during the life of your marriage, your spouse cannot lay claim.
Inheritance and gifts from a third party that you receive as an individual are also your own, provided you do not actively increase its appreciation.
Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to firstname.lastname@example.org.