Women and Money:

Using prenups to gain relationship & financial security

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Thinking about a prenup? It’s a smart move, and Elle Woods would be proud of you. Many women are finding that prenups are less about planning for the worst and more about building a strong foundation for their future together.

Prenups aren’t just about divorce. They’re a financial roadmap, a way to protect your assets and a tool for conflict resolution. They can even be a part of your estate planning. Studies actually support the notion that prenups can foster trust, understanding, and a stronger marital bond by having open conversations about finances, goals, and expectations.

Let’s dive in!

Did you know prenups are a financial planning tool?

Prenups might as well be called a “premarital planning tool” because they are a powerful way for couples to build a solid plan for their lives together. Prenups offer a structured approach to several key aspects of a shared life and beyond:

It’s a Financial Roadmap:

Prenups aren’t just about divorce. They can detail budgeting, saving, and investment strategies that will be used during the marriage. This ensures both partners are on the same page financially. Not only that, but this proactive approach can prevent future misunderstandings and conflicts. For example, John and Kate create a prenup together. John wants a joint bank account, but Kate does not. They need to discuss this option together before getting married and include it as a clause in their agreement.

Asset and Debt Protection:

By clearly outlining asset ownership and debt responsibility, prenups protect each partner’s financial interests. This is crucial, especially in cases of pre-existing assets or debts brought into the marriage.

Personalized Conflict Resolution:

You already have a prenup. It’s your state laws. If you didn’t know already, state laws dictate divorce proceedings by default. A prenup allows couples to create their own rules. Plus, you can potentially opt for less adversarial solutions like mediation. This can save time, money, and emotional distress.

Estate Planning Supplement:

While not a substitute for a will, prenups can complement estate plans. They can include elective share waivers or other clauses that discuss certain aspects of estate planning. For example, John and Kate both want their assets to go to their children from previous marriages, so they both waive their right to inherit from one another in their prenup.

Overall, prenups provide a structured framework for couples to discuss and agree upon crucial aspects of their life together. It’s not about being divisive. This proactive approach can foster trust, understanding, and a stronger marital bond.

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Prenups make your marriage stronger…here’s how

Prenups often get a bad rep, thanks to Hollywood, the media, and old stigmas. The truth of the matter is that prenups actually fortify marriages in several ways. And before you roll your eyes, hear us out:

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1. Reduced conflict in the marriage: Prenups establish clear financial boundaries, preventing future misunderstandings or disputes. This transparency can alleviate financial stress and foster trust between partners. For example, you can include clauses that determine how marital finances will be spent during the marriage, which properties are managed by who, who is responsible for certain debts, and more. This clear boundary setting can ensure both people are on the same page.

2. You have clarity and understanding: The process of creating a prenup requires couples to have open conversations about their financial expectations, goals, and values. This deepened understanding can strengthen your bond. For instance, financial disclosure is the legal requirement for two future spouses to share all income, debt, and asset values with one another. Having a greater understanding of this financial picture can help you two align your life goals.

3. Create a joint future together: Prenups are basically a financial planning tool that is tailored to the unique needs and circumstances of each couple. Getting a prenup together means planning out things like having children, retirement goals, what happens if one person were to pass away, and much more. Working on a prenup effectively brings you together to plan out your life… aw!

4. Respect for one another: By proactively addressing potential challenges, couples demonstrate a commitment to their future together. This can foster a sense of security and mutual respect. For instance, what is truly more respectful and romantic than making sure the love of your life is financially protected, even if you aren’t with them anymore?

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Studies show prenups do not increase the likelihood of divorce

With the help of a team of real psychologists, HelloPrenup uncovered some interesting data on prenups and marital success rates. The data that exists supports the idea that prenups ≠ increased odds of divorce. In fact, the studies we found on this topic point to one glaring conclusion: Prenups are actually linked to greater marital success. Here’s how:

There is no direct link between prenups and divorce:

This study specifically noted that there is NO DIRECT CORRELATION between prenups and divorce. Woo hoo!

What does increase divorce rates is financial conflict:

However, the same study above indicates that financial im disagreements are a significant predictor of divorce. (You see where we’re going with this). By addressing financial expectations upfront, prenups reduce future financial conflict. Less financial conflict = less likelihood of divorce.

Open conversations about finances decrease the odds of divorce, too:

Other studies have also highlighted the importance of open communication regarding finances for a decreased likelihood of divorce. The good news? The process of creating a prenup requires such communication about finances, likely benefiting the marriage.

HelloPrenup’s customers said they felt more connected after getting a prenup:

In a survey of couples who got a prenup through HelloPrenup, a staggering 83% of users reported feeling more connected to their partner after completing the agreement.

Takeaway: Prenups decrease financial conflict by setting up expectations before marriage and fostering open financial communication. Both financial conflict and lack of financial conversations lead to an increased risk of divorce. In addition, prenups in and of themselves are not linked with a higher divorce rate.