Now that everyone's favourite comic-book redhead Archie has finally popped the question to the sultry and spoiled Veronica, the question keeping financial planners awake at night is: Will they get a prenuptial agreement?
"In an engagement and the planning of a wedding, there is a whirlwind of emotions that can sometimes cloud what needs to be done," says Sue Neal, a regional director for Investors Group in Toronto. "Love is blind, but the position of a financial adviser is to make sure that your planning is not."
The much-hyped proposal issue of the iconic comic book series hits newsstands on Sept. 1 and while no one is suggesting that Archie is keen to get his hands on Veronica's daddy's stash of cash, the couple's financial situations could not be more different.
Veronica is wealthy, while Archie is not. Veronica lives to shop and spend, while Archie likely had to save - and perhaps even went into debt - to buy her that diamond ring. And with the economy in the dumps, who knows when the freckle-faced Archie will land a decent job?
Victor Gorelick, editor-in-chief and co-president of Archie Comic Publications, says that despite their divergent financial backgrounds, the lovebirds have no plans to sign a pre-nup.
Comic-book storylines aside, Ms. Neal dismisses the notion that it's crass to reach an agreement on how assets are to be divided in the event of a divorce, or to set some ground rules in the financial arena before the 'I dos' are even said. "It is not negative but simply wise to talk about the 'what ifs'."
Couples who tie the knot today are significantly older than was the case 50 years ago, which means they are entering the union with significant assets they might want to protect. The latest Canadian statistics show that about 11 per cent of marriages end in divorce.
It is not negative but simply wise to talk about the 'what ifs'. Sue Neal
The most common motive for a pre-nup is if one person already owns a house that later becomes the matrimonial home, says Jeff Rechtshaffen, a family law lawyer with Rechtshaffen, Breitman in Toronto.
To prevent their spouse from getting half of that home in the event of a split, they get a prenup, more formally known as a marriage contract or a co-habitation agreement.
People who are marrying for the second time, especially those who have children from a previous marriage, often opt for marriage contracts to make sure their first family is protected amid competing interests. If the person being remarried is already paying spousal support from the first marriage, he or she may not want to risk having to do so again.
In addition to the matrimonial home, marriage contracts can address the division of personal as well as business assets, anything from a heirloom such as grandpa's watch to a family-owned business to an investment portfolio.
Asking your husband- or wife-to-be to sign a pre-nup can be tricky, Mr. Rechtshaffen says. "So many trust issues are raised and emotions tend to get run roughshod."
If there is a good reason for the couple to have a pre-nup and the topic is broached well in advance, the emotional damage is minimal.
"But if the parents or someone else is poking their nose in and insisting that their child get one, in those cases the emotional damage can be very bad," Mr. Rechtshaffen says. "The one child is getting pushed into it by his or her parents, the fiancé feels like he or she is a gold-digger, and it is usually addressed late in the process."
For a list of financial tips for newlyweds, click here.
Regardless of whether a couple chooses to enter into a contract to protect the assets they entered the relationship with, all newlyweds should draw up a plan for how to proceed as a financial family unit, Ms. Neal says. That could include tactics for sharing mortgage expenses or combining real estate assets, which can be done without either partner losing their financial independence.
Basic financial things like whether the couple plans to combine their bank accounts and how they will work out a savings plan need to be addressed. Newlyweds can also benefit from certain tax advantages and income-splitting opportunities.
Lastly, anyone getting married or remarried needs to update their will, addressing both how they want their assets distributed and who they want to appoint as their power of attorney.
Roma Luciw is a writer and web editor of the Globeinvestor.com personal finance site. Please send any comments and story ideas to firstname.lastname@example.org.Report Typo/Error