4 Reasons to Consider a Prenuptial Agreement

Getting married is a significant step on multiple levels: emotional, physical, spiritual, and financial. With divorce rates in the United States reported to be around 50%, should you protect yourself by having a prenuptial agreement in place before getting married? Or is bringing up a prenup a fast way to tell your significant other that you really don’t think this is going to work out in the long run?


Pros and Cons of a Prenuptial Agreement

As with any aspect of getting married, there are significant pros and cons to prenups.

Pros of Having a Prenup

A prenup will protect both parties in the event they decide to end their marriage together. That protection comes in the form of a (mostly) clean split of financial assets as predetermined by the prenup. A prenup agreement protects both parties from having divorce law dictate how their assets are divided up. It helps both individuals to see the consequences of ending their marriage up front.

Cons of Having a Prenup

On the other hand, some argue that having a prenup is like putting a quick escape door next to the entrance of their marriage. If both parties know what will happen when things go downhill, it might just be easier to end things then rather than working through the pain.

A prenup is a contract. Having a plan of exit in case a business relationship doesn’t work out makes sense, but some believe that a prenup is like planning for your marriage to fail from the beginning. If that’s the case, why get married at all?

4 Reasons to Consider a Prenup

Aren’t sure if a prenup is right for your relationship? Consider the following reasons that you might want to consider this type of agreement.

One person has significantly more assets

If the wife brings a significantly higher level of assets to the marriage, she is at higher risk of losing something if the marriage ends. Many divorces result in an even split of the couple’s assets. If the husband brings $1 to the relationship and the wife brings $100,000, both parties could end up with $50,000 after ending their marriage. For the person that had nothing, this is a great deal. For the spouse with the $100,000 to start, a prenup suddenly looks attractive.

One person is a partner in a business

If the husband is a parter in a business, his share of the business could be split in a divorce and given to the wife. His business partners may not be comfortable with someone not directly involved in the business owning a share and may require him to have a prenup that at least covers this scenario. This protects not only the husband and wife in the event of a divorce, but the business partners as well.

One person has significantly higher debts

Likewise if one person has $100,000 in debts and the other enters the marriage without any debt at all, a divorce could result in the debt-free spouse owing part of the debt. If the debtor files for bankruptcy the creditors may look to the former spouse as a source of payment.

One person plans to stay home to raise the children

A final reason a prenup can be beneficial is to protect a spouse that stays home to raise kids. Voluntarily leaving the work force — and any developed career behind — has a significant financial impact from an individual perspective. A prenup could value this work and provide financial protection to the stay at home spouse in case the couple ends the marriage.

One Reasons to Not Get a Prenup

There is one reason where it simply is a horrible idea to get a prenuptial agreement: if you don’t think it is going to work out.

If that’s the case you don’t need to be getting married to anyone. There is a significant issue with going “Eh, it might not work out, but hey! I’ve got my contract so I’m covered!”

A prenup boils a (hopefully) deep emotional relationship down to a simple business transaction. There are instances where it can be used correctly to protect a business or from significant debts, but most of the time it just expedites the dissolution of a marriage.
Photo by Rio Calle.

About the Author

By , on Jun 11, 2013
Kevin Mulligan
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, and many others.

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  1. This is an important subject to discuss with your partner but mostly avoided by the vast majority of folks.

  2. Mary Slagel says:

    I’ve always stood in the middle when it came to prenups. I would be hurt if my fiance brought it up to me, but I would want in in the event I had more assets in the relationship. I definitely agree however that if you ask for a prenup for fair of the marriage failing, you should just walk away then.

  3. Prenups are definitely something that has to be evaluated by the parties. Unfortunately many people are too jaded by love and then they don’t get one. What can happen is it can leave them high and dry if something DOES happen.

  4. It seems that there is an unfair prejudice against prenups, when they are a viable way of building a healthy relationship. Thanks for your pros/cons recap.

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