The other day, Ben asked me to write about prenups. This request made me smile because after twelve years, I think I’m finally rubbing off on him.
I say that because I’ve become “that guy” that always brings up prenuptial agreements. I insisted my mom get one before she got remarried. I freely talk about the issue with my friends and coworkers. And I even brought it up at my brother’s engagement dinner. (My timing isn’t always perfect.)
While I understand not everyone feels the need to have a prenup, I think everyone should at least discuss the pros and cons of them before getting married.
What is a Prenup?
A prenup is a contract entered into before marriage, specifying the division of assets, future income, and control of property if the marriage dissolves. In short, you determine before you get married what will happen financially in the event of a divorce.
Some specific topics include:
Who gets to keep certain items in the household
Support payments for a nonworking spouse or spouse that gave up a career to raise children
How kids from a previous marriage will inherit property
How debt gets divided
Again, every couple should decide for themselves whether this type of agreement suits them. When having the discussion, you will likely run into these common points of contention.
A prenup takes the love and trust out of a marriage
Some opponents of prenups argue that entering into this type of agreement sets your marriage up for failure. In other words, you somehow doom your marriage by talking about it ending before it even starts.
This argument carries the least amount of weight with me. I think providing fairly for a partner shows a tremendous amount love and compassion. And you will treat your spouse fairer in a time of love before a marriage, rather than in an environment of a bitter and contentious divorce.
In addition, a prenup is like any other financial tool. No one hopes that they will need his or her life, disability, or health insurance policies. But that doesn’t prevent many of us from getting them. And with stats like one in two marriages end in divorce, you’re more likely to get divorced rather than become disabled or die prematurely.
Only rich people need prenups
I concede that couples that don’t have assets and make similar amounts of income may not need a prenup. However, just because you don’t need it, doesn’t’ mean it wont benefit you.
In fact, a lot more situations exist where you should get a prenup:
You have a lot of assets
You are in line for an inheritance.
You own a business
You have kids from a previous marriage
You may leave the workforce to care for children
You make considerably more than your spouse
Your partner has a lot of debt and you don’t
In the end, you never know what twists and turns your life will take. Just because you have nothing now, doesn’t mean you wont’ have a lot later on. I tell Ben he will be happy he signed a prenup when he becomes the next JK Rowling.
As an added bonus, the process of creating a prenup causes you and your spouse to get honest about your finances and really take stock of your current situation. Couples can only benefit from sitting down and putting everything that they have on the financial table.
Prenups are costly
Now this argument has some teeth. Each spouse must get his or her own independent counsel when negotiating a prenup. And at hundreds of dollars an hour, lawyer fees add up quickly.
However, this argument cuts both ways. Lawyers will still cost hundreds of dollars an hour should you need one in a divorce proceeding. And you will likely need one for more time in a divorce than you will in negotiating a prenup.
Having a prenup can help streamline a divorce and limit costs. Consequently, paying the money now for a valid prenup may actually save you money in the long run.
Whether to get a prenup could lead to tense arguments before your marriage. However, in my eyes, the benefits of having the discussion far out way the detriment of that conflict. Don’t let the bad rap given to prenups steer you from making a beneficial financial decision.