Everyone loves singing along to THE classic song about prenups, but few have actually taken the time to consider if they need one. A lot of people don’t like the idea, and I can understand that, but it’s important to consider. You don’t want to wake up in thirty years with a mountain of regret because you didn’t cover your bases. Think of it as another form of due diligence, taken for your financial security. Let’s get rid of the stigma and break down why “we want prenup” (or don’t)!
What Is A Prenup?
A prenup, formally referred to as a prenuptial agreement, is a contract for couples to make before getting married. It can be used for several things, but it is mainly for setting spousal support expectations and laying out how property will be divided. In other words, it lays out what will happen in the event of a divorce. Doing this before any potential divorce can help keep a huge emotional charge out of it. If you have a divorce and don’t have a prenup, it’s up to the state to decide how everything will be taken care of.
The Perks Of A Prenup
There are tons of perks that come with getting a prenup, so lets break each one down.
It Opens Up Communication
Getting a prenup, despite assumptions, actually helps with communication. Everyone knows all the financial details upfront, and people can clarify their priorities. Of course, couples should talk about finances before a prenup, but this will help people get into the nitty gritty details. Also, if you plan on merging finances, this can also be great for that. Not only can it give some division of who owns what, but it can also let you know your future spouse’s expectations about it.
It Can Save Time And Money
I hate saying this, but if your relationship ends in divorce then a prenup is always a good thing. It’s already in order, it’s taken care of and decided. Your lawyer fees will be much lower, and the proceedings will be far quicker. If you get a divorce you’ll be undeniably grateful for having gotten a prenup in the first place.
Your Inheritance Is Preserved
It’s true that a lot of states have laws about inheritance, but many don’t have clear-cut regulations on it as it relates to divorce. Creating a prenup will ensure you’re able to keep whatever your inheritance may be, and that you can protect it in the event of a divorce. Beyond any potential dispute with a spouse, many family members want to be sure your inheritance is yours and yours alone. This makes guaranteeing their wishes a less painful process.
It’s Possible To Protect Yourself From Debt
Yes, it is possible to protect yourself from some of your partner’s debt. Be careful here, but consult with your lawyer and see what provisions can be made. This can be something to give you the extra sense of security you crave. Furthermore, it’s always good to avoid debt if you can. There are great ways to eliminate your debt, but the best method is prevention. Do what’s best for your finances, and make sure the prenup covers you as much as it can.
Prenups Give The Government Less Say In Your Fate
This, in my opinion, is a great benefit. By setting up a prenup, you’re less prone to falling prey to some law that leaves you AND your spouse unhappy. The government can’t guarantee your happiness or security, by any stretch of the imagination. Take it upon yourself to at least guarantee a modicum of financial security. If you don’t do it now, it’s possible you’ll pay for it later and regret it.
It Helps Set Roles And Expectations
In my opinion, this is a bit of a tertiary perk of prenuptial agreements. Yes, you can use it for setting roles and expectations in the marriage. However, just remember the main purpose. It is to make sure both you and your spouse are secure, despite whatever may happen in the future.
The Negatives Of A Prenup
Now, I’m definitely a fan of prenups and think there are a lot of positives. However, there are many drawbacks worth mentioning too.
Prenups Aren’t Great For Romance
Without a doubt, talking about prenups hurts the romantic side of most relationships. It’s not pleasant to think about a potential divorce with someone you love. It’s even worse to think about the marriage statistics. However, it doesn’t have to kill the romance in the relationship. If you begin from the angle that it’s meant to make you both more secure, it can be a great boon to your relationship. Focus on the positive aspects and the security it provides, it doesn’t need to come with misgivings or be a huge point of contention.
It Is Hopefully Unnecessary
The worst thing about getting a prenup is if you never use it. You paid for this contract, went through the trouble, and it never got used! Fortunately, I don’t think anyone would ever complain about this problem. You created the prenup for security, but if you didn’t need to use it then that’s even better. The best case scenario is for you to not need it. Even though I think prenups are good for many couples, I certainly hope you don’t end up having to use it.
A Prenup Can Cause Distrust
This leads back to the issue of romance. Sometimes people can feel like their partner is trying to pull one over on them. They can feel backed into a corner. If your partner is trying to manipulate you through a prenup, that’s a huge red flag and you should rethink the relationship. At the end of the day, BOTH of you need to benefit from the prenup. It should never be a one-sided ordeal, and hopefully your personal counsel can help you make something that is great for both of you.
Should I Get A Prenup?
As with everything in personal finance, it’s personal. It depends. Many people should definitely get it, but some don’t need it. When in doubt, it’s probably safer to err on the side of getting one. However, if you have no notable assets or concerns with how the state will divide your finances, then you’re fine. Personally, I far prefer being able to choose my own destiny, so I recommend getting it, especially if you have any concerns about your financial future (and you already own significant assets).
Conclusion
If you have any thoughts on prenups, or tips for people getting one, be sure to leave them in the comments! If you’re a newly married couple, I highly recommend you learn the fundamentals for saving and investing money by using Acorns. For more content like this, be sure to sign up for the Bitter to Richer newsletter – we even send out a free budgeting template and goals worksheet when you join!
