Introducing the Financial Contraceptive

The average lifespan for Baby Boomers is only three years away (2029). Wills and Estate lawyers have a lot to do to update Wills, Powers of Attorney, and so on. Family lawyers will have a field day arguing over inheritances that have fallen into the property pool.

Wills and Estate lawyers need to acquaint themselves with the advantages that flow from having a Prenuptial Agreement, given that more than 50% of second marriages fail.

Documenting advances from the Bank of Mum and Dad is no guarantee that they won’t be considered a financial resource. Then there is the dreaded Erosion Principle, where the credit for assets brought into the marriage evaporates over time. This is the concept that puzzles accountants. The Prenup is the only way to quarantine assets from the Family Court’s Erosion Principle.

Sex sells, so think of your Prenup as the financial equivalent of a contraceptive. It fits the blended family situation perfectly. They pose little risk as both parties have the same objective – certainty if they separate. There are unlikely to be disclosure or duress issues. As stepchildren grow older and understand financial matters better, they will come to appreciate the existence of a Prenup. Your 15-year-old feral stepdaughter will probably need more.

The good news is that a Prenup can be entered into during the relationship. So it’s not too late to rectify the situation. It then becomes a Nuptial Agreement.