Finances

You might think you don’t need a prenuptial agreement (more commonly referred to as a “prenup.”) Maybe you’re young. Or you don’t have much in the way of assets. You’re going into marriage with your eyes wide open. You feel confident that you and your future husband have the money issues ironed out. You trust each other and you’re not going to get divorced anyway.

No matter how confident you are that you have things handled, there are so many reasons why a prenuptial agreement is a good idea. Check out our top ten reasons to have a prenup:

1. It helps clearly define the financial responsibilities of each spouse during the marriage. It forces you to have deep money conversations NOW and make sure that you’re on the same page about how the money will be handled during your marriage.
2. It protects assets acquired prior to the marriage, such as a business or inheritance. The laws differ from state-to-state, and in many situations, assets that you own prior to the marriage could become part of the divorce. You might think that they’re safe because you bought them before you married, but that’s often not the case. But a prenup allows you to fully protect those assets.
3. A prenup ensures that each spouse retains control over his or her own assets in the event of a divorce. Whether you purchased something before or after the marriage, you can make sure that the things you bought still belong to you even if you get divorced.
4. You will have a plan for how the assets will be divided in the event of a divorce, rather than leaving it to the court to decide. A judge doesn’t know you and your family. Do you want that judge deciding what’s “best” for you? Do you want your state’s laws dictating who gets what? With a prenup, you and your spouse can make your own decisions about the assets.
5. Your prenup can include provisions regarding the distribution of assets if either one of you dies. This may be especially important if either of you comes into the marriage with children. You may have assets or financial interests that you want to protect if you die, and a prenuptial agreement can help you do that.
6. If you have children from a previous marriage, a prenup can protect their assets and their inheritances. You likely want to make sure that any accounts or assets that are earmarked for your children are safe.
7. A prenup can provide you financial security if your marriage ends. You don’t have to wonder what a court will do regarding the division of assets or spousal support. You will know exactly what you will receive or pay, because you have it spelled out in your agreement. This financial security is especially important if you’re planning on being a stay-at-home-mom. Without an income source of your own (and with a gap in your career!), you could be left in a precarious financial position if you separate from your husband. The prenup can ensure your financial well-being.
8. It can provide a framework for resolving disputes related to finances during the marriage. With clear clauses in the pre-nup about how finances will be handled while you’re married, you can always refer back to it to help settle disagreements. Your prenup can outline who pays for what, how asset purchases are handled, and who has responsibility for various aspects of the finances.
9. A prenup can establish a plan for dealing with debts and liabilities. This can apply to debts that exist at the time of marriage, and those that are incurred after marriage. For example, if your spouse comes into the marriage with student loans and you make the monthly payments while you’re married, your agreement could state that you would be entitled to be paid back if you split up. Or… if one of you runs up credit card bills during the marriage, you might have a clause in the prenup that says the person who made the charges will be responsible of the payoff of the debt. (Be careful here, though. What if you were the one using a credit card, but all of the charges benefited the whole family? You’ll want to think of these kinds of possibilities.)
10. Your prenup can state how much spousal support (if any) will be paid if you divorced. It doesn’t matter if your state laws say you don’t qualify for alimony, because you could put alimony into your prenup. You can decide on a specific amount of alimony or a formula that would be used to calculate it. The goal is to protect both the person paying the alimony, as well as the person receiving it.

If you’re already married, then you can’t do a prenup. But you CAN do a post-nup (postnuptial agreement) which is the same kind of contract, but is done after you’re married. It offers you the same types of protection… And when I say “protection,” I’m talking about YOU deciding what’s important to you and what needs protecting, rather than letting your state laws tell you what is important and having a judge decide how things get split up if you ever get divorced.

What if you did a prenuptial agreement before you got married? But now some things have changed…. You can do a post-nap and both agree to get rid of that prenup. You can make a new agreement that reflects your current situation and your preferences for dividing the money in case you divorce.

Remember: A prenuptial or postnuptial agreement isn’t just about the possibility of divorce. It can also help clarify financial rights and responsibilities during your marriage. By having a clear understanding about the money before you get married, your chances for successfully navigating the finances together during your marriage are higher.