Prenup agreementsOne of the hardest discussions to have with clients is whether a prenup agreement is advisable.

I once had a client who assured me that his intended wife was fully on board with the idea of a pre-marital agreement. When they came in, she took one look at the document, said “What the hell is this?” -and left crying. Relying on one party to say that both parties understand and agree to a prenup is a mistake I will never make again.

In Louisiana, parties can enter into a pre-marital agreement, or “prenup” prior to marriage. After marriage, generally, a marital agreement has to be approved by court order. In other words, a prenup is easy while trying to do the same thing after the marriage takes place is more complicated.

Here are  some tips for getting the conversation started with clients suggested by Kimberly Foss, writing for Financial Planning magazine:

1. Start early. Everything else involving a wedding takes time and months of planning. Spend time talking about a prenup and planning way before the wedding and avoid some stress. Beverly Foss suggests correctly that executing a prenup at the last minute could suggest later on that the agreement was entered into under duress.

2. Manage the romance aspect. Yep, a prenup is not romantic -but it is practical. It is often the party with more assets (the one who most needs a prenup) who is most resistant. It is seen as “insulting” to the prospective partner. This argument can be countered with making the client understand that a prenup can also provide for financial care for the ex-spouse should a divorce take place.

3. Talk about assets and liabilities. Many people believe a prenup is not advisable because the couple has no assets. OK, but what about liabilities? What about that $100,000 student loan that is being brought into the marriage as a huge debt? Although it would generally be considered a separate debt, there are many circumstances where it could be considered a community debt absent a prenup.

4. Sell it as an insurance policy.  Everyone is familiar with the concept of risk. The risk of your house burning down is very small, yet you have no problem paying year after year to minimize the impact of things going wrong. On the other hand, the risk of divorce is about 50% -even more in some places. So, why not insure that the parties are protected if things go wrong?