We hate to Love Prenups but you need one

Disclaimer: I’m not a lawyer. My insights come from extensive research and discussions with a family law attorney, not legal training. Always consult a professional for legal advice.

Everyone should have a list of “exit strategy items” in life.

Things that you’d rather have and not need, then need and not have.

That list of things: a condom, a gun, and – drumroll – a prenup!

“Prenup” sounds like a dirty word that will get a few side-eyes. (Can you say gold-digger?” Scandalous!)

But it’s actually a ‘love contract‘ and a defence to have everyone protected. Premarital agreements, as they’re formally called, is a staple every couple should have.

I get you don’t want to sign anything you didn’t read or do not understand. But here’s the hard truth: you’re going to have a prenuptial agreement whether you like it or NOT!

It’s called the divorce law.

So if you do not have a premarital agreement in place that you and your partner agreed – guess who decides who gets what? The government.

Here’s some scenarios why a prenup is a necessity in marriage planning – and it’s not just for millionaires:

Imagine…

Scenario #1: You’re a hard-working stay at home mother. You both decided that you’ll drop out of college, decrease your earning potential, delay/sacrifice your career to raise the kids. You’ll be entirely dependent on one breadwinner. While you both plan on forever, something happened and now you’re getting a divorce. Think you’ll get half of the assets? Think again. Depending on where you live, you’re entitled to what’s called “equitable distribution”. The courts will look at numerous factors and investigate your life before splitting the marital assets to what they deem is fair. It might be less than you expect.

Scenario #2: You’re an entrepreneur with a start-up. You hope the start-up will make money in the future, and you know the venture carries a lot of risk. While a couple plans for forever, let’s say the venture fails and pulls the family down. How will the assets be divided then? And who and how will everyone be compensated if the venture does successfully?

Scenario #3: You’re a couple with disparate debt levels. One partner has massive student loans. The other has a lot of credit card debt. In the case of divorce, who gets what debt? It would be rather unfair to pay MORE than what you already owe, so how would you separate the debt if at all?

Scenario #4: You’re a grad school couple. One partner is getting his PhD while the other works as a teacher. The couple pulled their resources so the grad student can complete his education, know full well the income disparity currently and in the future. Would the teacher’s efforts be acknowledged?

Every couple “plans for forever”, but it also doesn’t prepare for market crashes and accidents that could alter their life plans. My own concerns were being a stay-at-home mother and being screwed over because I was dependent on someone.

And consider the cost: divorcing is also big business! To divorce on an average income can run as high as a year’s salary.

So ditch the fantasy that everything will be perfect and without effort – it’s far better to come together as partners to have these discussions beforehand.

Imagine yourselves as two enterprises – because YOU ARE.

Marriage planning ensures neither of you would become trapped by circumstances, particularly financial ones, should the marriage end. It is a process of aligning your values and visions for the future.

So What IS a Prenup?

Asking for a prenup is not a forecast in a relationship. It’s a tailor made contract that both parties’ security is fair and secured.

It’s a legal document agreed upon before marriage
It outlines asset distribution in the event of a divorce

What a Prenup is Not

Only for the rich. It’s for anyone and everyone who wants to manage their wealth properly.
Sign of distrust. It’s actually a sign of mutual respect and practicality.

What a Prenup Can Cover:

(Pre-)Marriage Assets: Includes savings, property, and investments. It allows you to maintain individual ownership of assets brought into the marriage. And you can specify what remains separate and what is considered marital.
Division of Marital Property: You decide how assets are divided, rather than leaving it to state laws.
Debt Responsibility: Clearly outlines who is liable for debts, both pre-existing and accumulated during the marriage.
Inheritance Handling: Ensures any inheritance remains individual property and with the intended family lines, unless decided otherwise.
Alimony Details: Otherwise known as spousal support, determining if one spouse will provide financial support to the other after separation. It specifies conditions, avoiding court-imposed decisions that might not fit your situation.
Divorce Proceedings: Encourages arbitration over court battles, and clarifies attorney fee responsibilities.
Estate Rights and Death: Allows customization of estate entitlements, differing from state default rights.
Children Outside the Marriage: Protects assets intended for children from previous relationships.
Governing State: Designates which state’s laws will apply, useful if you move.

What a Prenup might not cover:

Topics like child support/custody or anything pertaining a third person, cannot be predetermined in a prenup. Similarly, clauses on infidelity or domestic duties are generally not enforceable.

The Simplicity of a Prenup:

A prenup doesn’t have to be lengthy. It can simply articulate crucial agreements about asset division or other specific concerns you have.

Requirements: Your prenup must be in writing and signed by both parties. (Really, that’s it.)

BUT there are other things to consider:

Each Party should have their own legal council. Your individual interests are represented and protected. Your lawyer can help you highlight other blindspots you might have too.
Negotiate. Sit down formally, and don’t undermine this step. Approach with transparency and document everything.
It ought to be signed well in advance of the wedding to prevent claims of duress. Usually more than 28 days.
The signing of the agreement should be witnessed by a third party, preferably a notary.

Conclusion

Prenups are more than financial safeguards – you’re gearing up for the best version of your partnership.

It’s the best relationship insurance—you hope you never need it, but man, isn’t it comforting to know it’s there? Talking prenups means you’re both serious about sticking together, rain or shine. Till Death – not debt – do us part, no?

Whatever you and your partner decide on the issue of prenups, the fact that you’ve put real thought into it can only strengthen your future together.

Here’s to long-term financial security!

Common Questions:

Why is a Prenup Important?

Reduces conflict over division of assets in the event of a divorce
Protects inheritance and personal savings
Safeguards business and investments

What if I’m already married?

If you’ve never signed a prenup prior to your marriage, you can look into post-nuptial agreements. There are also cohabitation agreements; this is when people are not married and living together.

Can a prenup be changed?

Yes, and this is dependent on the legal laws of where you live. So long as you follow proper amendment procedures.