I wonder how famous the song ‘Chapel of Love’ by The Dixie Cups would have been if it sang, “Goin’ to the chapel and we’re, gonna get married… but let’s sign a prenup first, in case this doesn’t work out, honey!” Amidst all the excitement of planning your dream wedding and preparing to embark on a lifetime of happiness, there’s one conversation that may be difficult for some: prenuptial agreements. Yup, those legal documents that help sort out your finances in any event. But before you dismiss the idea of a prenup, let’s dive into why having this potentially difficult conversation might just be the smartest thing you do before saying, “I do.”
What is a prenup?
A prenup is a legal document signed before marriage that lays out the division of wealth in the event of divorce, separation, and sometimes death. Many couples consider prenups as a way of protecting assets, to protect trust funds or expected inheritance, or to establish what assets should be left to children from a previous marriage.
In essence, a prenup is a plan today for something you can’t predict happening in the future and which you hope never will. It’s like buying any form of insurance; you hope you never have to use it, but it’s there for peace of mind, just in case.
Prenups have been a part of marriages for decades but were typically only used by those holding significant wealth or who had a high-profile status. Today, we see a lot of celebrities discussing prenups, and with the rise of divorce, these premarital agreements are becoming a lot more commonplace.
The money elephant in the room
Let’s address the elephant in the room, shall we? For people who aren’t aware of the benefits of prenups, mentioning a prenup may conjure up negative feelings from your partner. There are a lot of preconceived misconceptions and myths hanging around prenups that just aren’t true.
Many couples shy away from discussing prenups because they find it uncomfortable to talk about money matters. However, if you’re still uncomfortable discussing finances with your soon-to-be spouse, then this is something you seriously need to address immediately. Finances will be the ever present current running through your relationship, and it is a fool’s game to believe it will just all be fine.
Start now by scheduling a money date with your future spouse where you can sit down together and openly discuss your financial situations, goals, and boundaries. Having an open dialogue around money and finances, to begin with, will make the discussion of prenups a whole lot easier and less out of the blue. The aim is to make money in your relationship a non-issue, something that you both feel comfortable openly talking about and sharing, regardless of what your individual situations are. This is meant to be your person, after all, through thick and thin. When talking about money becomes your norm, and you’re planning your financial future, it’s not a far leap then to discuss putting in place insurance for your financial futures too, which is the purpose of a prenup.
The benefits of a prenup
What really are the perks of prenups, and are they worth the potentially difficult conversations required? (Spoiler alert: the answer is yes!)
Many couples assume that getting a prenup is a costly procedure and an unnecessary expense amidst all the other spending associated with the wedding. Thankfully, HelloPrenup has democratized the entire process for soon-to-be newlyweds, making it not only more accessible but more affordable, too. Having a prenup in place can also save a lot of money on future litigation and lawyers if your fairytale ends up in divorce.
A prenup helps remove that fear of uncertainty and instead allows you to progress forward together with a greater sense of trust if approached properly, which I’ll share how to do below.
Prenups aren’t just about safeguarding your wealth either; they can also promote transparency and communication in your relationship. A lot of research shows that discussing financial goals, expectations, and concerns before saying “I do” can strengthen trust and understanding between you and your partner, laying the groundwork for a healthier and more harmonious marriage.
Why women should consider prenups
A lot of people mistakenly assume that prenups are put in place to protect the wealthier partner in case of a divorce, which traditionally has been the man, but this just isn’t true. In a New York Times article, associate professor at Northwestern University, Celeste Watkins-Hayes makes the point that prenups are actually a form of financial protection for women.
She shares that women hold only about 36 cents of wealth compared to men for a number of reasons, including the pay gap and taking primary custody of children, which makes it more challenging to save, invest, or remain debt-free.
A prenup is not just to protect one person’s wealth to the detriment of the other; it’s really to ensure an equitable division in line with often unspoken assumptions couples have entering the marriage, for example, that if one partner was to take a step back in their career, that they would still be provided for. A prenup just ensures this is all put on paper.
The harsh realities
Despite around 40%-50% of first-time marriages ending in divorce, it’s reasonable to expect that most, if not all, couples will all optimistically walk down the aisle with the assumption that theirs will last forever.
Financial expert Suze Orman advises that the best time to figure out finances is when things are rosy in the garden, not when stubborn thorns have grown in the marriage. “The time for you to plan for the ‘what ifs’ of life is when you are in a state of love, and not when you’re already drawing battle lines.”
Prenups are not just for managing wealth but for managing debt, too. With the average American holding personal debt of about $22,000, excluding mortgages, prenups can also be used to determine how debt acquired is to be handled.
The difficult conversation made easy
Now that we’ve debunked some of the myths surrounding prenups and highlighted their benefits let’s talk about how to broach the subject with your partner.
- First and foremost, choose the right time and place. Avoid springing the topic on your partner out of the blue; instead, find a calm and private setting where you can have an open and honest discussion.
- Next, approach the conversation with empathy and understanding. Acknowledge any concerns or hesitations your partner may have and assure them that you’re not questioning your love or commitment to each other. Frame the discussion as an opportunity to protect and strengthen your relationship rather than as a sign of distrust or pessimism.
- Then, be clear with your intentions. Your partner may not know much about prenups and hold the same misconceptions that we’ve explored here today. Share this article with them and explain, as I did here, how having a prenup is like having insurance in place. Something you both hope and intend to never have to use but will provide financial peace of mind in case of the worst.
- Emphasize to your partner that this is not a one-sided deal either. Especially if you have a greater net worth than your partner or have significant differences in income levels. Clarify how a prenup is to provide financial protection for you both, with the aim to be equitable and fair on both sides. Not to financially manipulate or take advantage of them.
- Finally, be prepared to listen and compromise. Remember, a prenup is a mutually agreed-upon contract, not a one-sided deal that either of you gets to dictate fully. Just as much as compromise will be necessary for a successful marriage, set yourselves up by starting on the right foot by being open and willing to compromise with aspects of your prenup, too. Be sure to consider each other’s needs and concerns, and be ready to negotiate and find common ground that works for both of you.
The bottom line
To tie a bow on this discussion, while talking about prenups with your beloved may not be the most comfortable conversation to have, it’s undoubtedly one of the most important. By addressing financial matters openly and honestly before tying the knot, you can lay the foundation for a stronger, more resilient marriage. Start now by scheduling your monthly money date with your partner and use it as your gateway to normalize discussing finances and your future together.
Don’t let the potential awkwardness today deter you from financially protecting yourself in the future. After all, if you are signing up to marry your person for life and commit to one another, why not sign the paperwork to sort out your finances, too, just in case?
Laura Tynan is the founder of The Witch of Wall Street, a personal finance and investing community, where women are shown how to manage, multiply and manifest money, using simple strategies. Laura holds a BSc Hons in Finance, is a Chartered Accountant, and is certified in EFT Tapping, Breathwork, and RRT. She has been recognized by the Financial Times as a Top 20 Future Female Leader and by Yahoo! Finance as a Global Champion of Women in Business. She is a multi-award-winning speaker who has spoken at, and been featured in, Forbes. Laura hosts The Witch of Wall Street podcast and is the author of the personal finance and investing book for women, by the same name, which is available now on Amazon.
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