The Pros of Prenuptial Agreements

While controversial, prenups can have their benefits.

The phrase “prenuptial agreement” may well be the two least romantic words in the English language. Prenups have a negative reputation, in part because people simply don’t like thinking about the possibility of divorce when they’re getting married. But that reputation has likely been cemented by print and online media outlets running rampant with stories about ultra-rich oligarchs leaving spouses penniless after years or decades of marriage. But these are extreme scenarios that are exaggerated for the sake of drawing viewers, and paint over the fact that there are many situations in which signing a prenuptial agreement can make sense.

So why would you actually want a prenuptial agreement?

Prenuptial agreements allow you to plan for your future when you are the most in love and likely to be fair.

So far, it has yet to be proven that anyone can predict the future.  Many things can happen during a marriage that you can’t predict.  Aside from the “fault based” reasons for a breakdown in a marriage such as infidelity or growing apart, medical issues, accidents, and other unforeseen events can change or destroy an otherwise happy marriage with no “fault” to anyone.  If you and your soon-to-be wed can discuss what you’d want for each other given a change in circumstances while you are totally in love with each other you will more likely come to an agreement that is fair to one another.

Prenuptial agreements make it easier to know what to expect in the case of divorce.

While most people don’t care to spend too much time contemplating the end of a marriage that they are about to begin, soon to be spouses who have children or other dependents have good cause to plan for all contingencies. With a prenuptial agreement in place, you know exactly what the lay of the land will be if it ever becomes necessary to divorce your spouse, and you can take steps to makes sure that everyone’s stability and security is ensured, as well as potentially save yourself tens of thousands of dollars in attorney’s fees.

A prenup can be used to protect one spouse from the debts of another.

Marriage doesn’t just mean the comingling of money, but of debts as well. A motivated debt collector can in some cases go after the spouse of someone who owes money, or attempt to use a couple’s community property to satisfy that debt.  This is especially true if one partner has an existing support obligation, such as child support, from a previous marriage or relationship. Signing a prenuptial before marriage is one way of preventing one spouse’s debt from becoming the other’s problem.

Prenuptials can clarify inheritance for those with messy family trees.

As noted above, when a couple is planning on getting married, it’s important for them to watch out for existing dependents, such as children from previous relationships. If there are heirlooms, special pieces of property, or family business shares that need to be kept within a specific family, a prenup can be used to ensure that where necessary, property will bypass typical paths of inheritance. (However, you should still be sure to file a will or trust in these cases—a prenup isn’t an alternative to typical estate planning measures.)

A prenuptial agreement can be used as a means to kick start long-term financial planning.

Prenups can be used to set in stone each spouse’s financial responsibilities in the marriage. If one or both partners are planning on going back to school, a prenup can be used to structure how spouses will provide for one another, and the proportionate responsibility for paying off student debts. A prenup can also be used to delineate how credit cards and bank accounts will be used for various expenses, and when credit card payments or savings account deposits need to be made.

However, it’s important to know what prenuptial agreements can’t do.

For starters, prenuptial agreements cannot be used in any way, shape, or form to set up child custody arrangements or structure child support. States across the country take an especially keen interest in protecting the rights and welfare of children, and will not honor any prenuptial agreement that attempts to restrict a parent’s rights to custody or visitation, or that limits or eliminates child support payments. Attempting to use a prenup in this manner can actually result in the entire agreement being thrown out.

In addition, some states do not recognize prenuptial agreement provisions that limit or eliminate alimony. It’s important to have a thorough understanding of your state’s laws if you’re considering incorporating the topic of alimony into your prenuptial.

Lastly, prenuptial agreements are limited to matters that are related to finances and assets. Prenuptials cannot be used to specify anything having to do with the function of your household, the raising of your children, or other family matters. While some of these—especially those having to do with family planning (i.e. if you are planning on doing IVF, and are determining what’s to be done with any unused frozen embryos if you happen to divorce)—are matters that can be established through legal contracts, they are not appropriate for discussion in a prenuptial.

While prenuptial agreements are controversial and sometimes misused, they can be effective and useful in the proper contexts.