Let’s be honest. Even bringing up the word prenup can be awkward and depending on your audience, you might get some nasty glares. However, with divorce rates up to 50% according to the American Psychological Association, it is something that needs to be considered.
A prenup, also known as a prenuptial agreement, is a contract between both spouses that is finalized prior to marriage. Within this contractual agreement, each asset and liability that both parties own together or individually is called out and given an assignment of who it will belong to in case of divorce or death.
We often hear about prenups when it comes to reality TV stars, giving prenups a bit of a bad connotation. After all, marriage is about being together forever right? So what is the point of naming asset ownership in case of divorce? Why even bother getting married if you think you’re going to get a divorce? Well, a prenup is actually so much more than that and can be used strategically to bring you and your partner closer.
The Many Benefits of Prenups
Prenups don’t have to just be about divorce, they can also be about what happens to finances if a death were to occur. Another morbid topic, yes but something that happens to us all so why not try to prepare to the best of your abilities.
These agreements are also beneficial due to the fact that they can really help you and your spouse talk about each of your financial health. This helps bring upon full financial transparency which one would argue, should always be clear prior to tying the knot.
Obviously, this contract can help you protect your assets, any family heirlooms and what not but it can also help you protect your spouse from inheriting your debt. That’s right. If you and your spouse get a divorce, they might actually have to take some of your debt in the divorce process, or vice versa. So why not try to help the one you love the most by making sure they don’t have to pay any of your money owed?
Since divorce rates are at a record high and your odds of unfortunately going through one are at the flip of a coin, prenups can be an incredibly beneficial tool. Not only to protect your future self but to protect your spouse as well. This would, in turn, affect any depends that come in the future as well.
Make sure when you first bring up this topic, you do so in an unaccusing way. You don’t want to have anyone thinking that you don’t have high hopes for the marriage or that you’re not fully committed. Emphasize how it important it is for you to make sure that both parties are entirely taken care of in case of death or divorce, including any dependents.
All in all, the decision to have a prenup is one that you and your significant other should at least discuss.
Final Thoughts
Whether or not you need a prenup is a decision that you and your significant other need to work through however it would never hurt to be overly prepared. Also, as mentioned above, it really does help each side of the relationship become completely transparent when it comes to assets and liabilities.
Do you have a prenup? Was it hard to ask for one?
For more reads, check out these articles:
- What Is A Nest Egg and How Do You Build One
- This Is Why You Should Keep Your Money Yours: Relationship Advice
- Spender vs. Saver Relationship: How To Make It Last
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