When you hear “prenup,” you may immediately cringe and think, “How unromantic.” However, considering a prenuptial agreement may prove to be one of the most romantic steps you take in your relationship — that is, if you consider a long, healthy marriage romantic. Starting a marriage with a common financial understanding can help avoid the future disagreements and distrust that destroy so many marriages.
Having the “prenup conversation” sets an enduring precedent for the marriage. It infuses the relationship with openness and honesty, and ensures that both spouses are knowledgeable about finances from the outset. The conversation enables partners to share their values and ideas about money before it is too late.
While an agreement can be put in place at any time during the marriage, particularly when financial circumstances change (called a postmarital or postnuptial agreement), ideally couples should begin the conversation prior to an engagement or soon thereafter. Any agreement should be entered into at least several months before the wedding. Agreements executed within weeks of a wedding, or even after invitations have been mailed, may be vulnerable to challenge in court.
Couples who do not necessarily intend to marry but who live together, share property, share expenses, or contemplate starting a family should also consider putting a financial agreement in place. Indeed, without the legal protections afforded married couples, people in less traditional relationships are particularly suited for agreements that specifically detail how financial issues will be handled in the event of a breakdown of the relationship.
People do not sign prenups because they think they are headed for divorce. A prenuptial, postnuptial, or other financial agreement between couples is a safety net. The hope is that it will be put at the bottom of a drawer and never looked at again. However, it is there should the relationship sour. Some agreements include a “sunset provision” whereby the agreement expires, is amended, or the terms automatically change if the relationship lasts a certain amount of time.
Couples should be prepared to have an open and honest conversation and to share all financial information. Consider using a mediator, especially one who is a lawyer, who will be able to guide you with respect to questions you should be asking each other and what kinds of provisions can and cannot be included in the agreement. Whether or not you use a mediator, each person should consult an independent attorney. If either party has not been represented by counsel, the agreement can be susceptible to a challenge in the future.
Having a conversation about financial values and expectations is right for every couple. Some situations that might especially warrant consideration of a prenuptial agreement include:
Parents of college-age children — If you’ve set aside money for your children, own property you wish to keep in the family, or expect a bequest or inheritance, start speaking to your children before they are romantically attached. Plant the seed that you expect or hope that they will make smart financial decisions, be open with their future partner, and enter into a prenuptial agreement.
Premarital ownership of property — If either or both of you own property or have accumulated assets prior to the marriage, a premarital agreement can ensure that you protect separate property, even if shared money is used to pay expenses or make improvements.
Entrepreneurs — Even if your venture has not taken off prior to a marriage, you may have invested a lot of time and money, and wish to ensure that you retain full ownership and profits.
Successive marriages — If you have been married before, you may be more inclined to have a forthright conversation about finances in advance of marriage, especially if there are children from previous marriages.
Age — If you are older when you embark on a marriage, one or both of you may have attained a high level of financial and career success. A prenuptial agreement can allow you to specify exactly how you wish to share or not share in each other’s financial successes.
Modern marriage — Young couples today tend to be financially savvy and open, and share comparable career goals. Discussions about expectations around families, career breaks, and finances are more common than in prior generations and can lead to enduring understandings reflected in well-written, balanced prenuptial agreements.
As difficult as financial conversations may be, having the prenup conversation early can help set the tone for a long-lasting, honest, and cooperative marriage.
This article is made available for informational purposes only by Kimberly Gantcher Spodek PLLC, and should not be construed to be formal legal advice. By reading this article, you understand that there is no attorney-client relationship between you and the firm. The content of this article should not be used as a substitute for obtaining competent legal advice from a licensed professional attorney.
Kimberly Gantcher Spodek is a member of the DailyWorth Connect program. Read more about the program here.