5 Reasons To Open A Money Market Account

Are you looking for a place to park your savings? Do you need an account that blends accessibility with a high rate of return? 

Look no further! True North Money Market accounts offer convenient features with an attractive rate of return to help your money grow. You’ll earn a handsome return on your money without the risk of the stock market or the restrictiveness of a Share Certificate account.  

couple talking to staff money market on computerMost Money Market accounts have a minimum balance requirement. Here at True North, you can open a Money Market account with as little as $2,500.

Here are 5 reasons to open a Money Market account:

1.) Security – Funds in your Money Market are Federally Insured by NCUA up to $250,000. This means you can keep a large sum of money in your account without the risk of losing it to a market crash or a poor choice of investment.

2.) Accessibility – Money Market accounts have no maturity date. You are free to access the funds in your account at any time, typically without penalty. If you have a True North Money Market account, you can make up to [6] withdrawals from your account during each statement cycle.

Because of their accessibility, Money Market accounts are perfect for those large, occasional expenses like tuition payments, emergency household repairs and unexpected medical fees.

3.) High interest rates – Money Market accounts offer a rate of return that surpasses your typical savings account. Check out our latest rates here.

Give your money its best chance at growth!

4.) Account benefits – Like every account here at True North, your Money Market account comes with loads of benefits and attractive features. Ask us what they are!

If you’ve got a question or concern with your account, we’re always here to help. You can drop in for a chat, or contact us by phone at (907) 523-4700. A Branch Representative will be happy to assist you.

5.) Personal checks and debit card access –  Money Market accounts offer flexibility. In fact, the funds can be easily transferred to your checking account. Then, you’re free to use the funds to make payments by writing personal checks or using your debit card.

Are you ready to start saving big? Open a Money Market account at True North today! 

Your Turn: Do you have a Money Market account? Tell us what you love about your account in the comments below!

Why Beer, Cars And Washing Machines Are About To Get More Expensive

The president has made good on his promise to come down hard on the country’s trading partners by slapping hefty tariffs on a long list of imported goods. Some of these tariffs were passed earlier this year, some went into effect as recently as last month, and others are expected to take effect in the near future. 

As a tax-paying citizen, who likely purchases more foreign-made goods than you realize, you owe it to yourself to learn how these new tariffs will impact your wallet. And we’re here to help you do just that! 

First, let’s explore the general concept of tariffs and review those that recently went into effect. 

A tariff is a tax on imported goods. The individual consumer or American company purchasing the imported product is responsible for paying the tax associated with it. The ultimate purpose of a tariff is to give an edge to U.S.-manufactured goods by raising the prices of their foreign-crafted counterparts. 

Tariffs have long-lasting effects on the economy that fall beyond their intended purpose: When a company is forced to pay more for its materials, it will likely pass this extra expense onto its own consumers. Alternatively, they may choose to cut costs by hiring fewer workers and giving fewer raises to employees. Some companies will even move part of their production overseas. 

The first of the recent wave of tariffs, targeting washing machines and solar panels, went into effect earlier this year. These were followed by a recent 25% tax on imported steel and a 10% tax on imported aluminum. Another wave of tariffs will go into effect later this month, focusing on hundreds of Chinese industrial goods. More are still planned, including taxes on Chinese-made TVs and cellphones. 

Let’s take a look at how these tariffs impacted various industries and what it all means for the American consumer. 

1.) Washing machines 

The first move in the trade war taxed imported washing machines by 20-50%. The tariff was passed in an effort to stop Whirlpool from losing out to Korean-based Samsung and LG, who were grossly undercutting Whirlpool’s prices. While the move initially boosted the American company’s stock and employee base, the more recent tariff on steel will push up Whirlpool’s costs and likely offset any previous gains. 

What this means for you: The price of washing machines has jumped by 17% in the last three months. Once the steel tariff hits the industry, those prices are likely to increase again. 

2.) Solar panels 

Imported solar panels were hit with a 30% tariff in January, 2018. However, there are plans for this tax to gradually decrease over the next few years. Like the tariff on washing machines, this tax was imposed because American manufacturers were losing out to offshore companies that were undercutting prices. 

An incredible 80% of all solar panels in the U.S. are imported from overseas. For businesses that manufacture solar panels, this tariff is great news for their bottom line. But the many companies in the business of installing, marketing and distributing those panels have been dealt a near-fatal blow. 

What this means for you: The average price for solar panels is expected to increase by 40% over the next year.  

3.) Aluminum 

The 10% tax on imported aluminum was created to help American manufacturers of this heavily used raw material. Unfortunately, though, the many American companies that use aluminum for the production of their own goods will be forced to pay more for this essential metal. They will then pass this extra expense onto their customers. 

While the administration is hopeful that the tariff will force the country to produce more aluminum, there’s no way for America to manufacture enough of this raw material to meet the country’s needs. 

What this means for you: Your favorite drinks will likely see a price increase. Lots of beverage companies, like Coca-Cola and Budweiser, rely on cheap and imported aluminum to keep their costs down. You might see a price hike in lots of canned food products as well. 

4.) Steel 

Steel was recently slapped with a hefty 30% tariff. Like the aluminum tariff, it was passed with hopes that the U.S. will increase its steel production, thus creating more jobs. But, in another echo of the aluminum tariff, the U.S. doesn’t have the capacity to produce enough steel to meet its needs. It is also likely that the negative effect the tariff will have on other industries will more than counterbalance any gains. 

What this means for you: The steel tariff has the largest impact of all; steel is used in the production of a huge scope of goods. 

Here are some industries that will be affected by the steel tariff: 

  • Cars. The American auto industry produced 11 million cars last year. With close to  2,000 pounds of steel used in the production of each car, the auto industry is going to be hit hard by the tariff. Naturally, car prices will rise dramatically.
  • Construction. Steel is used heavily in construction and renovations. Expect to see an increase across the entire construction industry.
  • Airline travel. Steel is a major part of every airplane. Expect to see flight costs rising thanks to more expensive steel.
  • Appliances.  All major household appliances, like refrigerators and washing machines, are created from steel – and they’re all about to get more expensive.

There’s not much you can do about the upcoming price hikes, but now that you know what to expect, you won’t be in for much of an unpleasant surprise when you purchase products manufactured overseas or crafted using imported materials. 

Apple Pay, Samsung Pay And Tokenization: How To Stay Safe With The Wallet Of The Future

Left your wallet at home? No worries; you can still pay for those purchases! Just use your phone.

Apple Pay, Samsung Pay and other mobile wallets are revolutionizing the checkout experience by blending two developments in payment infrastructure to save you time: near-field communication (NFC) and token encryption.

Approximately one-third of all payment terminals nationwide have been updated to accept Apple Pay. However, it only works on phones equipped with the necessary NFC equipment. If you already have an iPhone 6 or a newer iPhone, though, all you need is the preinstalled Passport app. There are simple, on-screen instructions for adding a debit or credit card. You can even add your True North card!

Samsung Pay is structured similarly, but only works on select Samsung Android devices. However, Samsung has incorporated magnetic secure transmission (MST) technology as well. Hold a phone against a payment terminal and it will emit a signal that simulates the magnetic strip on a debit or credit card.

In terms of convenience, this means you can use Samsung Pay on almost any payment terminal in the country. The only situation where Samsung Pay won’t work is when you need to insert your card into a slot, such as at a gas station. Otherwise, though, you’re free to use this payment method even if the merchant hasn’t updated their equipment.

Both payment methods use a process called “tokenization” for maximum security. In the simplest terms, tokenization is the use of a non-secure piece of data to stand in for a secure one. It’s like arcade tokens. The secure data is the quarter, which you exchange at a machine for a token. That token then tells the arcade machines you have a quarter (or credit) to play. The game machine never sees the actual quarter, but accepts the token that stands in its place.

Apple Pay and Samsung Pay work the same way. When you make a payment with one of these services, the app creates a token – a random series of numbers – that corresponds to your account, along with a one-time security key. It transmits that data to the payment terminal, which sends that token to the “token vault,” a secure database that links these tokens to the actual accounts. If the security key is correct, the token vault will transmit a charge directly to the linked cards and return a verification of funds to the payment terminal. Since the token vault is hosted at the payment processor, the point-of-sale terminal never sees your card information. 

This is different from a swiped or keyed transaction. Ordinarily, the terminal reads your credit or debit card information directly and transmits it to the payment processor, which then sends it to your financial institution. This means your card’s information is stored in three different places, any of which could be the site of a data breach.

With tokenization, your information is seen only by the payment processor and your financial institution. That’s fewer points of failure along the information chain and there is less vulnerability for your sensitive data.

This also means that Apple and Samsung have no idea what purchases you’re making. For fans of internet privacy, this is heartening news.

There are other layers of security involved in these services. To use Apple Pay, you’ll need to use TouchID, FaceID or input your PIN. For Samsung Pay, you’ll have to authenticate your fingerprint, input a PIN or confirm an iris scan. If your phone gets swiped, a thief will have a hard time using it to go on a shopping spree. In contrast, if a criminal grabs your actual wallet, they can do enormous amounts of damage to your finances and credit score before you even realize it’s gone.

Whether you’re a die-hard Apple fan or a staunch Samsung supporter, mobile wallets are an efficient, secure way to pay. Download the app, link your True North card, and start leaving your wallet at home!  

Your Turn: Are you an Apple Pay fan, or do you use Samsung Pay? Brag about your brand loyalty and the reasons that drive it in the comments!

What’s The Best Way To Finance A Home Renovation?

Q: I’m doing some home renovations this summer and I’m not sure how to finance this expense. There are so many loan options, but which one makes the most sense? 

couple painting fun playful

A: Whether you’re gutting your entire kitchen or turning your basement into a home theater, we’ve got you covered! As a True North member, you have several choices when it comes to funding a home renovation. And we want to help you find the right one for your specific needs. 

First, let’s take a look at some common choices and why they’re not the best idea for financing a home renovation project: 

1.) Home Equity Loan 

A home equity loan is a loan that’s secured by your home’s value. Home equity loans allow you to borrow a fixed amount of cash, which you receive in one lump sum. Most home equity loans have a fixed interest rate, a fixed term and a fixed monthly payment. 

Cons:

  • Taking out a home equity loan can mean paying several fees.
  • Receiving all the funds in one shot can push you into spending more than you actually should.
  • You may find that the amount you borrowed is not enough.

2.) Credit cards 

You may already have your credit cards open and won’t need to apply for a new loan, so you may be thinking, why not use this available credit to fund my renovations? 

If you’re only doing some minor touch-ups on your home and you can afford to repay the charge within the next year or two, a credit card could work. 

For bigger projects, though, funding them through your credit cards can have devastating effects on your financial health.   

Cons: 

  • You may be stuck paying interest of 15% or more until you pay off the balance on your card. This means your remodeling project will cost you a lot more than necessary.
  • Your credit score will likely be negatively affected by the large, unpaid balance on your card by pushing your balance to total available credit ratio well above 30%.
  • You might send yourself spinning into a cycle of debt once you already owe so much money on your card.

3.) Personal loans 

Personal loans are short-term loans that may or may not be secured by some form of collateral (like a car or other titled good). They typically need to be repaid within 24-60 months. 

Cons:

  • Upfront costs and interest rates on personal loans can be relatively high.
  • Like a home equity loan, you’ll receive all the money you borrow in one lump sum. This can compel you to spend it all, even if you don’t need to do so.

4.) Retail credit cards 

Retail stores often lure customers into opening a credit card with the promise of being granted automatic savings when using the card for future store purchases. Some retailers, especially home-improvement shops, may encourage you to finance a large renovation project on their card. However, this is usually not a good idea. 

Cons: 

  • Retail credit cards tend to have exorbitant interest rates of up to 30%.
  • With so much credit available, the urge to splurge and go all out with your renovations will be that much stronger.

5.) Merchant loan 

A merchant loan, or a merchant cash advance, is a loan that’s taken out against a business’s anticipated revenue. If you are a business owner, a merchant loan will need to be repaid with a predetermined percentage of your future revenue.  

Cons:

  • Merchant loans usually come with high interest rates.
  • The percentage of your sales that you’ll need to pay is fixed. This means that, if your sales spike, you’ll be paying more and putting yourself and your business at a disadvantage.  

There are so many loan options and so many strings attached! How can you fund that home renovation?  

Enter the home equity line of credit (HELOC). 

A HELOC is an open credit line that is secured by your home’s value. HELOCs have adjustable interest rates and have a “draw” period in which you can access the funds, ranging from 5-10 years. When the draw period ends, the loan will have to be repaid, either immediately or within the next 15-20 years. 

If you’re approved for a HELOC, you can spend the funds however you choose. Some plans may require that you borrow a minimum amount at each draw, keep a predetermined amount outstanding (balance), or withdraw an initial advance when the line of credit is first established (initial draw/advance). 

When looking for a way to pay for home improvement projects, we recommend a HELOC. And for good reason.  

Here are just a few benefits of choosing a HELOC over another loan type: 

You’ll save money 

HELOCs help you stick to your budget. Instead of walking out with a huge amount of cash when you open the loan, you’ll have access to a line to use as needed. This credit will only be available to you for a specified amount of time and it will have a fixed amount as your maximum draw. You’ll withdraw money in the amount and at the time you need. Plus, you’ll only pay interest on this amount (not the whole line). This aspect of HELOCs makes them especially convenient if you don’t know exactly how much your project will cost. 

Upfront costs for HELOCs also tend to be lower than those of other loans. 

Flexible terms 

Most HELOCs have fluctuating interest rates, but some lenders allow for the possibility of converting large withdrawals into fixed-rate loans. 

Repayment of HELOCs is also flexible. When the draw period ends, you may be allowed to renew your credit line and continue withdrawing funds as needed. 

Monthly payments also vary. However, many lenders only require borrowers to make payments toward the interest of their loan during the draw period. Once that time is over, the borrower will need to pay back the entire principle of the loan immediately, or over the course of 10-15 years. This is especially beneficial if you don’t have the funds to pay back the loan now, but you anticipate an improvement in your financial situation over the next few years.  

Also, because you’re only paying interest on the money you withdraw, you’ll have the freedom to take out a larger line of credit and decide how much of it to use later on. 

You’re improving your home’s value 

It makes perfect sense to borrow against your home’s equity for adding to its value. If you plan on selling your home within the next 10 years, it is very possible for a HELOC to pay for itself, and then some. 

Are you ready to get those renovation plans rolling? Call, click or stop by True North today to get started on your HELOC application! 

Your Turn: How did you fund your home renovation project? Share your choice with us in the comments!

All You Need to Know About the Ticketmaster Breach

Hackers are at it again! In late June, Ticketmaster announced that several of its sites had been compromised. Recent research reveals that this breach was only a small part of a massive credit card-skimming hack.

Here’s what you need to know about the Ticketmaster breach:

What happened?

Sites, like Ticketmaster, often rely on a third-party code that is hosted on other sites to support their own payment systems. If this code is breached on its host site, every site that uses the code will be compromised.

That’s what happened with Ticketmaster. Several Ticketmaster websites ran code from Inbenta, a customer support software company. When Inbenta was hacked, the sensitive information of these customers was compromised.

Inbenta claimed only these Ticketmaster customers had been affected by the hack. However, cybersecurity firm RiskIQ has found that some of Ticketmaster’s global sites – including its U.S. site – were running code from SocialPlus, another third-party company that had been compromised by the same group that hacked Inbenta.

RiskIQ has stated that more than 800 international e-commerce sites have been compromised in this hack. That’s because any website that relied on code hosted on Inbenta or SocialPlus was also compromised.

To execute the hack, scammers changed the code on the host sites to skim the credit card information being entered at checkout on the e-commerce sites.

RiskIQ identified Magecart as the hacking group behind the attacks. This group has been active since December 2016, and RiskIQ has been tracking them for nearly as long.

According to a threat researcher at RiskIQ, this breach has a larger impact than any other credit card breach to date. The cybersecurity firm disclosed that close to 100 top-tier sites have been breached.

What should I do if my information has been compromised?

  • Place a fraud alert on your credit accounts. This will warn creditors that you may have been victimized by identity theft.
  • Consider a credit freeze. This will make it impossible for a hacker to open new credit in your name.
  • Alert the Federal Trade Commission. Let the FTC know you’ve been hacked at ftc.gov.
  • Tell us. At True North, we’ll help you determine your next step and guide you until your credit has been cleared.
  • Dispute fraudulent charges. If you find any suspicious charges on your credit account, dispute them immediately.

Scammers never take a break. Make sure you know what to do if your information has been hacked!

Your Turn: Have you ever been the victim of a credit breach? Share your experience with us in the comments.

Meatless Monday! You don’t need to be a

Meatless Monday!

You don’t need to be a vegan to enjoy these delicious sandwiches! 4 servings

Ingredients:
2 15.5 ounce cans dark red kidney beans, drained and divided
2 tablespoons olive oil
½ medium-sized onion, diced
½ teaspoon salt
¼ teaspoon pepper
1½ teaspoons chili powder
1 teaspoon brown sugar
½ teaspoon dried oregano
¼ teaspoon crushed red pepper flakes (optional)
2 cups canned crushed tomatoes
4 hamburger buns

Directions:
1. In a food processor, pulse half of the kidney beans.
2. In a large pan, heat olive oil over medium-high heat. Add onion, garlic, salt and pepper and cook until onion is translucent, about five minutes.
3. Add the chili powder, sugar, oregano and red pepper flakes (if using) to the pan and cook for an additional 2 minutes.
4. Stir in crushed tomatoes and bring to a boil.
5. Reduce heat to medium-low and cook for 10 minutes, or until thickened.
6. Stir the mashed beans and the remaining whole beans into the tomato mixture. Heat thoroughly and serve mixture on the sandwich rolls. http://ow.ly/i/GSF8D

5 Ways Retailers Manipulate Your Spending

Don’t get taken for a ride! Learn how retailers are manipulating your spending.

  1. BOGO. You don’t even need one of these items – why buy two?
  2. Anchoring. A high-priced item always looks cheaper next to an even higher-priced one.
  3. Urgency. You don’t really need to buy it now to risk losing a great deal. It’ll still be here tomorrow.
  4. Decoy pricing. Upgrading to the next size when it’s just a dollar more than the medium sounds like a great idea – except that you didn’t want or need the medium.
  5. Day-one markdowns. How can it be a markdown if it’s only been retailing for one day?

Your Turn: Have you ever bought a marked-down item only to discover that it wasn’t such a great deal after all? Share your experience with us in the comments!

APP REVIEW: Attraction-Finding Apps

Are you ready to have a rocking summer? Check out our list of attraction-finding apps so you can hit every hotspot in your hometown, or near your vacation destination. Go beyond Google Maps this summer, and experience the time of your life! 

TripAdvisor

TripAdvisor is your ultimate guide to worldwide hotels, movie theaters, restaurants and a whole lot more. The app does more than just bring up nearby attractions; you can also look through millions of reviews, images and videos featuring establishments around the world. Pull up the contact details of any place that looks interesting, choose a restaurant by food type or price range and boost the app’s database by posting your own reviews and photos of places you visit.

Best features

If you’re using an iPhone X, you’ll have the added option of a TripAdvisor widget that sticks around on your phone’s lock screen. The widget will bring up attractions that are near your current location so you can see what’s nearby without much effort! 

Glaring glitches

Like many apps, TripAdvisor has a basic, free version and an enhanced one – for a price. Many users find the free version to be lacking in scope. 

AroundMe

AroundMe is the attraction-finding app you’ll want in your pocket this season. Use this free app to search for a wide range of local spots, including the popular establishments, like restaurants and coffee shops, and the less-searched-for places, like hospitals and pharmacies. If you’re looking for it, they’ve got it! 

Tap the category you’re looking for and the app will bring up a list of local places that match your choice. You’ll also be shown where these locations can be found on a map. If you choose one of these options, the app will pull up details for you, including a phone number, street address, reviews and opening hours. Another tap will bring you to the business’s Google Details page. 

Best Features 

You can take your search up a level by tapping on the eye icon toward the top of the app’s screen and then holding up your iPhone or iPad 2. You’ll be shown a virtual view of the location of nearby attractions. This is super-helpful if you want to check out exactly how far you are from each place. 

Glaring Glitches

Critics of the app complain about the banner ads that can block up to 25% of the screen. Since the app is designed for use on the road, the ads are especially intrusive. There is an option to upgrade to an ad-free version, but it’ll cost you $2.99 a month. For that price, you can find something even more user-friendly in the AppStore. 

Foursquare

Though strictly a social networking app, Foursquare is an excellent way to search local hotspots. With more than 3 billion users, the free app can help you find the fun hangouts in town by pulling up all places near your location that are posted about and reviewed by the most Foursquare users. You’ll be able to look up loads of pics for a visual feel of the place and read reviews from other visitors. 

Best Features

Foursquare’s enormous community of users gives it access to more data than most similar apps. Since the app recommends attractions based on users reviews, you won’t be in for an unpleasant surprise when you pull up at an attraction. 

Glaring Glitches

Foursquare shines at social networking. However, you won’t find a map view, a GPS navigation tool or an extensive menu to search through. 

How they stack up 

App                                   Virtual View                  Images & Videos          Intrusive Ads         

TripAdvisor

No

Yes

No

AroundMe

Yes

No

Yes

Foursquare

No

Yes

No

Your Turn: What’s your favorite attraction-finding app? Tell us all about it in the comments!

Book Review: The Financial Diet

Are you always looking for a way to gain control over your finances without slogging through a long and tedious book that speaks a language you don’t understand?

Book Review branded graphic

If this sounds like you, The Financial Diet might be just what you need. The recently released personal finance book was created for people who don’t really speak “money talk” but know they need to do something about their money habits. You might be desperate to rein in your spending habits, looking for a way to crawl out from under a mountain of debt, or maybe you’re searching for tips to make your paycheck last until the end of the month. Whatever your situation and needs may be, you’ll find the answers inside The Financial Diet.

The Financial Diet

Written with people like you in mind, the book pulls no punches. It’s just straight, clear talk about the ABCs of personal finance. Author and popular blogger Chelsea Fagan has hunted down dozens of experts in all areas of money management and she’s ready to pass on the wisdom she’s found to you. Chelsea gets that personal finance is not just about investing and saving.  It touches every area of your life.

It affects the choices you make about what to eat for dinner, what kind of clothing you wear, and which model car you drive. The book covers a huge range of personal finance topics so that you can take control of every aspect of your life.

Inside The Financial Diet, you’ll find:

  • Tips on running a budget-friendly kitchen
  • How to broach sticky money topics with friends and family
  • The basics of creating and sticking to a budget
  • How to run your home responsibly
  • Investing for the clueless beginner
  • How to get that raise you’ve been after for years

And so much more!

If you’re the scholarly type who loves losing yourself in a thick tome that explores complicated money topics of all kinds, you may not like this easy-to-read book. But if you’re looking for a refreshing read that is packed with clear and simple advice on personal finance basics and beyond, you’ll love The Financial Diet.

You don’t have to take our word for it, though. Pick up a copy and start your own financial diet today!

Your Turn: Do you enjoy personal finance books written in simple, everyday language or do you like a more sophisticated tone? Share your thoughts with us in the comments!

Prenuptial Agreement

While most of us wouldn’t want to busy ourselves with the technicalities of financial planning during the blissful engagement period, as unromantic as it may seem, many engaged couples think it’s a smart thing to do. In addition to protecting assets in the event of a divorce or death, prenups can also help maintain marital harmony by clarifying financial topics that can otherwise become a source of conflict. Thinking of signing a prenuptial agreement? Here is a list of answers to some questions you might have.

couple signing papers

Q: So … what’s a prenuptial agreement?

A: A prenuptial agreement, otherwise known as a “prenup” or “premarital agreement,” is just a fancy term for a written, legal agreement signed by two individuals before marriage covering the financial aspects of their union. It aims to protect each spouse’s individual financial assets in case of a death or breakup and/or to clarify each person’s rights and responsibilities toward their assets during the marriage itself.

Q: Why would I be a candidate for a prenuptial agreement?

A: Prenups are especially beneficial for individuals entering second or subsequent marriages, those engaged to someone bringing excessive debt into the relationship and individuals who have a lot of assets. But you don’t have to fit into one of those categories; you may choose a prenup if you think it’s just a good idea to clarify some of the financial obligations and responsibilities of each partner during the marriage, or in case of a death or breakup.

Q: OK, what are the benefits of a prenuptial agreement?

A: Here are a few of the reasons people sign prenups:

  • Without a prenup, state law will dictate the direction of your assets when there is a death or divorce. Premarital agreements can help protect your assets from the state’s involvement.
  • If you have children and grandchildren from a previous marriage, premarital agreements can protect their inheritance and allow your property, which might otherwise go to your spouse, to be passed on to your children.
  • A prenup can protect a personal business, whose shares would otherwise be divided in the event of a divorce.
  • The agreement can protect one spouse from taking on the debts of another.
  • A prenup can limit the amount of alimony or support that one partner would be obligated to pay another in the event of a divorce.
  • Prenups can also clarify the financial rights and responsibilities of each spouse during the marriage, thereby avoiding future conflict.

Q: So, are there any drawbacks to prenups?

A: Here are some potential disadvantages to be aware of:        

  • The spouse whose support is limited as a result of the premarital agreement is naturally at a disadvantage once the subject of divorce is on the table.
  • While under the law, you would be entitled to a portion of the estate of even a deceased spouse, a premarital agreement can block that.
  • One spouse can lose the rights to a share in a business, even if during the marriage he or she invested time and effort in it and contributed to its growth.
  • Stepping into a marriage with a contract that sets forth the specifics of what will happen upon divorce might not be in the best interest of a healthy relationship.
  • It is difficult—and perhaps even unrealistic—to envision exactly how financial issues should be handled in the distant future.
  • The idealistic and romantic stage of engagement, in which death or divorce are far-flung possibilities, may not be conducive to making judgments that are in your best interest.

Q: If I want to pursue a prenup, what are the next steps?

A: You may want to follow some of these guidelines:        

  1. Though it’s not strictly necessary, it’s advisable to write out a premarital agreement together with your future spouse. Before getting started, disclose your assets to each other.
  2. Topics         that you may want to cover in the written agreement can include: any future business visions or plans for pursuing a higher education; provisions for the extended family; how property and finances as well as increases or decreases in income will be handled and managed during the marriage; a plan for dividing or distributing property—such as homes, a business, liquid property and other assets— in the event of a divorce or death; and whether and how much alimony or spousal support will be awarded.
  3. Once the document is written, it should be signed by both parties. It’s always a good idea to consult with a lawyer before the final paper is signed.

Q: What is not within the legal limits of a prenuptial agreement?

A: Wording that details illegal behavior or encourages divorce can invalidate what is written on the document. Child custody rights and the welfare of children are also beyond the limits of this agreement. Some states may also prohibit the waiver of alimony or support. A prenup is a legal document on financial matters; avoid tackling domestic issues such as who will take the kids to school, who will wash the dishes after dinner and who will feed the cat.

Q: I think I get it. Is there anything else I should do to I ensure that the prenup will stand up in court?

A: To ensure the prenup is legally binding, it should:        

  1. Identify the two parties by their full, legal names. Assert that they are both entering into the agreement of their own accord.        
  2. State that the parties, though not currently married, intend to marry. Record the day the document will go into effect.
  3. The document must contain truthful information and have reasonable stipulations.
  4. That’s it, you’re just about done!

A premarital agreement need not destroy your premarital bliss. In fact, securing your financial future can help clarify marital-related financial issues that might otherwise become thorny.

Wishing you a secure financial future and congratulations on your engagement!

Your Turn: Do you have experience with establishing a prenuptial agreement? What advice might you have for others who are considering one?