Three Reasons a Prenup (or a Postnup) Is a Must-Have

A young couple hold hands as they sit across from a smiling financial adviser. — (Image credit: Getty Images)

When you’re in love and getting married, you naturally believe that it will last forever. Although many marriages last “till death do us part,” many marriages unfortunately also end in divorce. I should know — I was expecting to be married forever, but seven years after my wedding, I found myself getting divorced.

A prenup is something that engaged couples often don’t want to think about or may believe is only for the ultra-rich. And some might find the prospect of being asked by a fiancé to sign a prenup to be a red flag or an insult. But take it from me, as a woman who has been through a divorce and someone who talks to women about their finances constantly, a prenup is definitely something all engaged couples should draw up and sign.

Think of a prenup like a life insurance policy or a will. It’s not something you want to think about when you’re younger. But it is something you need to financially protect your loved ones.

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A prenup ensures that women and men alike, and their children from within or outside their marriages, are financially protected in the event they divorce. It doesn’t mean they will get divorced — but it can prevent a contentious, expensive and emotionally devastating process. These are just a few of the benefits:

1. Prevention of long, dragged-out legal battles.

With emotions during the divorce process running high, a prenup can mitigate the stress and intensity by spelling out exactly what both parties are entitled to, and who will be the rightful owner of individual possessions (like an expensive painting or home). Knowing that financial details are already settled can make the process of separating, and then divorcing, go smoother and faster — and prevent costly legal bills.

2. Protection of your assets and post-divorce financial independence.

Prenups can protect what you’ve earned before your marriage and ensure you maintain financial security following your divorce.

For example, women marrying later and/or bringing earned wealth into marriages need to protect that capital in the event they divorce. If women stayed home to raise children and/or take care of the household after marrying — enabling their spouse to go out and earn income — they need to ensure they will be compensated for lost years when they were not in the workforce.

Furthermore, if there are children from previous marriages or relationships, it is important to protect their assets, too.

3. Road map for handling conflicts within the marriage.

Marriage is a journey that comes with ups and downs. Learning how to navigate the tough times together, as partners, and emerge stronger as a team is key to a successful marriage.

Having to work together to create a prenup is a great way to start learning how to support each other and work as a team through a challenging conversation. In this sense, a prenup is one of the best gifts you can give your future married selves and set you on a path to a successful, life-long marriage. Having a clear understanding of each other’s expectations around what your future together looks like is integral to the inevitable success (or failure) of the marriage.

Getting started

Begin by having an open and transparent conversation with your partner. Depending upon the complexity of your financial situation, it is advisable that you include your financial adviser, who can help guide you both through this conversation.

Next, consult an attorney together to begin drafting a prenup.

Couples should sit in on all meetings and discussions to ensure they are both in full agreement about how assets would be divided in the (hopefully unlikely) event of a divorce. You can also consult your respective family attorneys to review the document before you sign.
On average, a prenup should cost between $1,500 and $4,000 to draw up — hardly placing it in the affordability of solely the super wealthy. Furthermore, the $1,500 to $4,000 cost of a prenup can save a lot more money in the future if your marriage breaks down.

Couples who are already married can also take proactive steps to mutually agree on how to divide assets in the (hopefully unlikely) event of a divorce. They can consult an attorney to draw up a postnuptial agreement, which is exactly the same type of agreement as a prenup, except for the fact that it is crafted and signed after marriage.

I understand wanting a marriage to last forever. My own parents were happily married for more than 52 years and were parted only by my mother’s passing. But I also know too well that not every marriage lasts. To avoid a costly and emotionally devastating legal battle over the fair distribution of assets in the event of a divorce and to ensure you and your children retain financial independence if your marriage doesn’t survive, take the time to put together a prenup before you say “I do.”

With money being one of the primary reasons why marriages break down, establishing the terms about how you will divide your assets and debts, and whether alimony will be paid in the event of a divorce, can actually set you up to have a healthier and more successful marriage.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Lacy Garcia is the Founder & CEO of Willow, an award-winning platform that connects women and NextGen consumers with their ideal financial advisor. Much like a dating app, Willow provides a free concierge matching service to individuals, connecting them with an Advisor for Women™ or Advisor for NextGen™ who they can connect with on a personal level.