Signing up for a Prenup

    OK, let's clear this up right now. A prenuptial agreement does not mean that a couple is expecting their relationship to end in divorce.  

But if it does, a prenup can prove valuable. And for folks who are getting remarried, the document has some particular advantages. 
  
Despite the hope that couples learn from earlier mistakes, data from the Department of Health and Human Services' National Survey of Family Growth show that 15 percent of remarriages end in three years, 25 percent are over in five years. Other studies put the remarriage failure rate substantially higher (60-to-70 percent), especially when stepchildren are involved. 
  
“They've got tough choices to make,” says Michelle Ash, a certified divorce financial analyst (CDFA) with Householder Group in Jacksonville, Fla., foremost among them being what do they want to leave to their children and what do they want their new spouse to have. A prenup can help them spell out those wishes and more.
    

PRENUPS FOR ALL 
    
Typically, people think about a prenuptial as something the very rich and famous use to protect themselves, says Nancy Mello, a CDFA and financial advisor with Merrill Lynch’s Global Private Client Group in Dallas, Texas. But they’re not limited to Donald and Ivana (or Donald and Marla or Donald and …).   

The documents are being used much more widely by individuals at all economic levels. Essentially, a prenup is simply a legally binding contract governing how a couple's assets, regardless of how much or little, will be divided in the event the marriage ends.  

“People who are getting remarried and have significant assets want to protect them,” says Mello. “Or those who remarry and have children they want to protect. Second marriages are often more difficult and it’s important for the children to have sense that they're being protected in a second marriage.” 

When there’s a disparity of income between the parties, the children of the higher-wage earning spouse may fear that they're going to be left out. “Something put in writing will put their minds at ease and make it easier for them to handle the remarriage,” says Mello.   

Lisa Turbeville, a certified financial planner and CDFA with Watermark Financial in Pittsburgh, Pa., recently worked with a remarrying couple in just such a situation.   

“She was the higher-income party, but each had significant 401(k)s, houses, significant other assets,” says Turbeville. Although each had children, there were no custody issues to consider, but the couple did want to examine expenses that would come up in connection with the kids.