It’s different with your 401(k) or the money accumulating in your company pension plan. If you die, the entire value goes to your spouse automatically, even if you’ve been married only for one day. If you want to leave part or all of this money to your kids, your spouse has to file a waiver with the plan trustee, giving up his or her rights. The waiver has to be signed and witnessed after the marriage, not before, and on forms provided by the plan. So get to it quickly! You can include an agreement to sign the waiver, as part of the pre-nup. (State law might differ, if the spouse claims the money during a divorce.)
Think carefully about your spouse-to-be’s moral as well as financial obligations. Are there children or parents to support? Might any of your income have to be tapped to help? The prenup might say “no,” but real life is something else.
So, there’s a lot to consider. Start the prenup discussion well before the wedding day. It will take longer than you think — not because of the paperwork, but because of the emotional issues that arise. You’ll need time to absorb each other’s ideas and reflect on what’s most important to you.
Also, I recommend sharing your thoughts with your adult children. Kids have a funny way of thinking that their parents’ money is already theirs and can’t help feeling suspicious about a new spouse horning in. It’s better for the family that they know what’s happening rather than living with question marks. In my case, my kids raised a good question that I hadn’t considered. By the time the papers were signed, everyone had bought in. Result: Last June, I went from being a widow to a wife again. It’s nice.
Jane Bryant Quinn is a personal finance expert and author of Making the Most of Your Money NOW.
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