I’ll never forget the first time I heard the term “prenup”. I was 12 years old, and the song “Gold Digger” was on the radio. I asked my mom what it meant, and she explained that it’s an agreement between married couples to protect each person’s money in case they get divorced. I remember thinking that seemed like a brilliant concept and, because pre-teen me assumed I’d be rich and famous, that my future husband and I would have a prenup.
I’ve remained firm on this decision over the years, especially after seeing my parents go through a messy divorce. But I’ve also learned that not everyone, including my own friends who have gotten married, shares my viewpoint. In fact, a recent study conducted by LegalShield found that 62% of people didn’t find it important to have a prenuptial agreement in place. While I still believe it’s the right answer for me, I’d be lying if I said others’ trepidation hasn’t made me wonder “Should I really get a prenup?”
If you’ve been asking yourself the same question, it may be time for some expert advice. Here’s everything you need to know about the benefits, drawbacks, and details of a prenuptial agreement before you decide whether or not to sign on the dotted line.
What is a prenup?
According to Jamie Berger, co-founder of divorce and family law firm Jacobs Berger, a prenup creates a plan for marital asset division and protects individual assets such as inherited family wealth, businesses, properties, and investments.
They can protect more than just income, though. Prenup coach and financial planner Kaylin Dillon has seen couples use them to set terms for protection from existing or future debt and the rights to children, pets, timeshares, or cars.
“Whatever the reason, having a prenuptial agreement allows a couple to agree on certain terms if they divorce down the line, which allows for certainty that does not exist without a prenup,” says Berger.
What are the benefits of having a prenup?
It can help improve communication
It’s hard to imagine that planning for a possible divorce can actually improve your relationship, but discussing a prenup before getting married can set you up for success. “While of course those conversations are not easy, they can be really valuable because it means that couples are communicating about the hard stuff early on,” says Berger. “Taking that walk down the aisle is the easy part. It’s the marriage that requires work, trust, and communication, and establishing that trust and open communication early helps start the union on the right foot.” Certified financial planner and divorce financial analyst Peter Locke agrees, saying that having open and honest conversations about money and expectations prior to marriage can help create a stronger and healthier relationship.
It may help avoid a difficult divorce
You know the saying “If you fail to plan, you plan to fail”? Well, the same can be true for prenups and divorce. In the event a marriage does end, a prenuptial agreement can help take a lot of the guesswork out of deciding who owns what and how assets should be divided. According to family law attorney Jason Alman, a prenup can help avoid a lengthy and expensive divorce. “Rather than gearing up for litigation at a time when you’re experiencing heartache, a prenup can reduce the potential for conflicts and disputes by clearly outlining the terms of property division and spousal support, ultimately promoting a more amicable separation,” he says. Why leave it up to a judge when you can find a solution ahead of time?
What are the disadvantages of having a prenup?
It can create distrust in the relationship
While it can be financially beneficial to have a prenuptial agreement in place, it can also have a negative emotional effect on the relationship. Talking about the potential for divorce can bring about feelings of doubt and lead people to question their relationship and its validity. “Many view a prenup as planning for divorce rather than planning for a happy marriage, leading to negative feelings about the relationship during the time the couple may be working out the details for their wedding,” says Alman.
It isn’t cheap
Much like weddings and divorces, prenups require time and money. Alman shares that depending on the complexity of the agreement, they can cost anywhere from $1,000 to over $50,000. There are free prenup forms available online, but Alman recommends couples should “invest in the cost of a professionally drafted and reviewed prenuptial agreement to ensure its validity and avoid costly legal battles in the future.” For this reason, some people only opt to sign a prenup if they have significant assets to protect.
I hate to say it, but there’s no right or wrong answer when it comes to getting a prenup. Much like finding a partner and saying “I do” to a proposal, only you will know what’s right for you and your relationship. The best thing you can do is educate yourself on the pros and cons (in true Rory Gilmore fashion), evaluate your financial goals both as individuals and as a couple, and maintain open communication with your spouse. After all, this won’t be the last big decision you make together.