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Prenuptial agreements

Nothing can kill romance faster than the "P" word -- or prenuptial agreement. Indeed, for first-time brides & grooms the very notion of entering into a "prenup," as they are commonly known, is a distasteful admission that their dream marriage could fail. But prenups are not a sign of future trouble in a relationship, nor do they signify a lack of trust between partners.

Prenuptial agreements are contracts entered into by the respective parties prior to marriage or civil union. Content varies widely, but usually focuses on finances -- specifically, how and when property, retirement assets, inheritances, life insurance, outstanding debt etc. will be divided in the event of divorce. In the event of a breakup, couples without a prenup will have their assets distributed for them by the courts if they disagree about who should get what. Therefore, prenups are designed specifically to supersede state laws that apply to dissolutions of marital property and limit the ability of courts to dictate property settlement terms.

According to Terry Savage, a nationally known expert on personal finance and a regular television commentator on CNN, CNBC, PBS, and NBC on issues related to investing, most legal experts agree there are two key ingredients to a valid prenuptial agreement: both parties must be represented by separate and independent legal counsel, and both parties must fully disclose all of their financial assets and liabilities or risk invalidating the agreement.

Obviously, circumstances may change during your marriage, and a good marriage will be flexible," Savage says. "But a bad marriage will break -- and that's why most prenuptials outline a support agreement between the spouses in case of divorce."

Couples with significant assets and/or children should consider having an attorney draft the agreement. Better yet, each partner should consider hiring their own attorney to write a prenup To save money, others might feel comfortable downloading forms or templates commonly available online. Either way, the completed document should be signed in triplicate, each partner getting an original copy and a third kept with an independent party or in a safety deposit box.

One caveat: certain matters -- including custody or access to children, child support, and the right to remain in or sell a matrimonial home -- are beyond the legal scope of prenuptial agreements. Otherwise, just about anything is fair game. Prenups aren't for everybody. But they can offer peace of mind and security that is the foundation for a long and happy relationship.