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The role of documentation in drafting a prenuptial agreement

As a Florida couple prepares to wed, there are a number of things that must be accomplished. Wedding planning often defines the months leading up to a couple's big day, but it is equally important to handle financial planning prior to tying the knot. A prenuptial agreement is not only an essential protective measure, but it also provides an opportunity for a couple to learn how their future spouse approaches money management.

The first step in drafting a prenup is gathering documentation on the full range of income, assets and debt for both parties. This includes pay stubs and employment contracts. If either party is employed on a commission basis or earns bonuses and/or profit sharing, that information must also be provided. Stock options are yet another aspect of income that should be discussed at this time.

Next, both parties should present documentation on any assets that they will bring into the marriage. This includes any form of inheritance, as well as savings or investments that are already in place. Retirement savings and existing pensions also play an important role here. Most couples will include provisions within their prenup that allow each individual to retain those assets that were already in place prior to the marriage.

In addition, this is also the time to have a frank and open discussion about the debt that each party will bring to the marriage. Documentation of any outstanding loans, credit cards and other obligations should be provided, including student loans or business debt. Here again, a prenup can state that any debt brought to the marriage will remain separate if the union should end in divorce.

Often, the process of gathering these documents will lead to a number of conversations about money management. This is a good thing for Florida couples, as it will allow both parties to enter into marriage with a better understanding of how their individual financial approach is likely to merge with that of their new spouse. A prenuptial agreement can protect both parties from an unfair division of assets if the marriage should end in divorce, but it also presents an opportunity to delve into important financial discussions prior to tying the knot.   

Source: nydailynews.com, "5 easy steps to protect your money in marriage - and divorce", Pam Friedman, Feb. 4, 2016

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