Should you sign a prenup is probably the better question, and the answer is yes. Whether you’re the initiator or the recipient a prenuptial agreement is a smart financial idea when entering into a marriage. It protects your (and your spouse-to-be’s) interests when it comes to all aspects of your financial life together from daily spending to final arrangements if one of you passes away.
It’s not a secret that financial issues can be a source of stress in a relationship, especially if one person feels inequality. Sometimes the subject of signing a prenup can bring out bad feelings, but that shouldn’t be the case.
Side note: Are you thinking of the Sex and the City episode when Trey asks Charlotte to sign a prenuptial agreement and her reaction is “I’m only worth $500,000, that’s all I’m worth?” I always think of that when the subject of a prenup comes up.
Think of it as open communication in your marriage
As a financial planner I can tell you that feelings shouldn’t be hurt and intentions shouldn’t be questioned when it relates your couple’s money. The truth is at the end of the day a prenup can help protect both parties in the marriage when it comes to spending, saving, investing and how credit is handled.
A prenup can have various clauses in it both financial and non money related. It can outline several other monetary factors within the marriage other than what’s mine and what’s yours. I think that’s a big misunderstanding about prenuptial agreements.
The point is not to separate your money, it’s purpose is to bring you both together on the same page so that there are no misunderstandings when it comes to money in your marriage. When you think of it like that doesn’t it just make sense to have the lay of the land laid out in black and white when it comes to your individual and couple’s finances?
Don’t assume when it comes to money, put it in writing
A prenup doesn’t only stipulate what happens to money when you break up, it can also state how current finances are handled. This includes how the monthly household bills are paid, who pays for the household expenses and what happens to family assets if one of you passes away.
According to Bankrate “Any couple who brings personal or business assets to the marriage can benefit from a prenup. You can basically do anything you want in a prenup, except you can’t limit child support, and you can’t limit child custody and visitation. The agreements can also specify that future income from a business or additional assets accrued through inheritance are not to be shared with your spouse should the marriage end.”
You can talk about non money related topics too
There are also a whole bunch of other non-financial clauses that can be put into a prenup, such as rules for intimacy, work schedules, obligations to the family and how your lives will change after you have kids. However in my opinion those are all things that should be worked out as they happen in a marriage, it’s hard to predict feelings and reactions in a “what if” scenario.
When it comes to family finances I think it’s best to keep it plain and simple so everyone can agree on the terms.
A pre-up is a good idea, especially if you come to the relationship with assets. My fiancé did not want to have a pre-up because he believes that having one meant that you were more concerned about money than the relationship. I ended up putting any assets that I didn’t want to bring to the relationship into a Trust that is only in my name. That way, if something were to happen or if the marriage went south, I would still have assets in my name only.