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Should We Really Have a Prenup? (Part II)

By Laurie Israel, national prenuptial agreement mediator, consultant and attorney. Author of “The Generous Prenup: How to Support Your Marriage and Avoid the Pitfalls.”  

Should We Really Have a Prenup?  (Part II)

Making a commitment, becoming engaged, planning a wedding, meeting the parents, the overall excitement of planning a life together.  All of these are exciting things that happen when people plan to get married.  

But there’s a “new kid on the block” – especially for Millennials, and even for Gen Z-ers (born 1995-2009), many of whom are now of the marrying age.  

The “new kid on the block” is a Prenuptial Agreement.  Many young people believe that these contracts are imperative for marrying couples.  Posts on the internet support this idea, which seems to now be the “idea de jour.”  

As a Baby Boomer (yes, guilty as charged), and looking at this from the viewpoint of an older (and I hope mature) person who is in a very long- term marriage, I like to raise the question in my online posts—is a prenup really necessary, or will it create more problems than it seeks to solve? 

I won’t go through all the downsides to prenups in this article – just search my name and “prenuptial agreements” and you’ll find my many impassioned writings on this issue, beginning with “Ten Things I Hate About Prenuptial Agreements” from 2010. Cutting to the quick, prenups often show a lack of love and caring and provide an easy way out when a couple hits the first bump in the road in a long-term marriage (which will happen—just like a motorcycle accident – it’s just a matter of time when it will happen). 



Having said that, for some people, there are a number of good reasons to formulate and enter into a prenuptial agreement prior to marriage. 

  1. Wealthy family. Some people who get married have parents or grandparents who are quite wealthy. Somewhere back there in the past, there was a successful business in the family that generated wealth, that is still being passed on through the generations. This is not a bad thing but can throw a wrench into a marriage if the benefits of being the recipient of the familial wealth, are kept on one side of the marriage only.  Couples can plan in a prenup how they will deal with such a situation. Just ignoring the situation won’t work. 

  2. High level of premarital assets.  People are getting married later these days. For the “professional” class, it is not uncommon to marry in their mid-30s, when significant assets have already been built up.  A prenup can take out the uncertainty of what might happen to the prenuptial assets if there is a divorce. It can also provide a vesting schedule for premarital assets to eventually be shared in a (hopefully) long-term marriage, where blending of all assets are often in order. 

  3. Ownership in a business.  When someone owns (whether whole or in part) a business, a divorce can disrupt the possible ownership interest of that business.  Prenups can set terms to insulate a particular business interest in the case of divorce.  It is equally important that the prenup defines the terms for sharing the income generated by and addresses any increase in the value of such a business which is generated by a spouse’s active participation in the business during the marriage.

  4. Figuring out how to pay premarital debt.  In most cases, premarital debt is the separate responsibility of the person who incurred it. But the act of paying the debt off will leave less income for that person to pay for living expenses and accumulate marital wealth and marital financial security (which is one of the aims of marriage). Often the educational value of obtaining a student loan was crucial to the higher earning power of the person who incurred it.  So why not view it as a joint marital expense? 

  5. Planning finances and full disclosure before marriage. This can be done without a prenup but can be part of the prenup process.  It’s important to have a full picture of both of your assets and liabilities before you marry.  There might also be some clarifying information (such as understanding of family trusts) that would be helpful at that point. It’s not romantic, but it can be quite beneficial.  

  6. Second Marriages with children from the first marriage.  This is one of the most common reasons for having a prenup.  People want to show loyalty and financial caring for their new spouse, but also often wish to provide for the children of their first marriage after their passing., A prenup can help a couple plan for this and provide a secure and sound (and balanced) solution that will benefit both of the spouses as well as the children of their prior marriages. 

  7. Providing estate planning commitment. Marriages always end. Either in divorce or death.  Anyone can change their estate plan the day (or the hour) before their death. Planning for what happens after one of the spouses dies, especially if it is a second marriage, is a very important factor in maintaining a feeling of financial security and fairness between the spouses. A prenup makes whatever the estate plan’s provisions are as put forth in the prenup, a legal commitment.  

  8. Setting a legal process in case of a divorce.  Many of my prenup clients are survivors of very ugly, protracted, and expensive (if a court contest is involved) divorces.  A prenup can set up the process through which the marriage can be terminated without going through litigation.  The prenup can set up a pecking order for this process, beginning with mediation, then using collaborative law, and finally ending with binding arbitration if needed. This can give people who are marrying a much greater peace of mind. 

In my next article, I’ll discuss the right and wrong kinds of prenups, if you do choose to have one, and what would be the best process to getting one done., This is crucially important when a prenup is involved, so that you and your partner do not become enemies right before your marriage.  

©2024. Laurie Israel.  All rights reserved. 

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