TV shows, movies, media reports, and even our culture’s obsession with celebrity breakups, have put prenuptial agreements, or prenups, in a poor light over the years. Misinformation and misunderstanding abound, causing some people to avoid going down the prenup route altogether.
Unfortunately, once a divorce is on the table, it’s too late to turn back time and put this helpful tool for financial security in place. It’s a sad situation that we see all too often. Our hope is to debunk some of the myths out there about prenups, so you can have a better understanding of what they’re all about.
COMMON PRENUP MYTHS
- Prenups are only for doomed or shaky relationships. This outdated notion assumes that only rocky relationships require prenuptial agreements to be put into place. This couldn’t be further from the truth. Rarely do any of us go into marriage assuming the worst—in fact it’s usually the complete opposite. But the truth is, life doesn’t always go as planned. And having a solid prenup not only allows for the unexpected, but this can also alleviate some of the hard feelings and ugly arguments that might otherwise happen. In this way, prenups actually show that you care deeply about the person you’re about to marry, and want to have open and up-front communication about your future.
- The process will put you at odds with your partner. Prenups are actually a great way to open lines of communication with your future spouse before you get married. As you’ve surely heard, finance disagreements tend to be one of the leading causes of divorce. Being transparent and starting financial conversations early means fewer surprises and disagreements down the road. Also, the process of creating a prenup involves collaboratively working as a team towards an agreeable outcome, rather than head-to-head competition.
- Prenups aren’t worth the money. In the grand scheme of things, paying for a properly-prepared prenup is a drop in the bucket compared to the possible ramifications of not having one should you need it. It’s much like home or car insurance: it’s not something we like shelling out money for at the time, but boy are we glad we have it when the need arises. A prolonged, messy divorce case costs exponentially more than a straightforward prenup, making them worth every penny.
- Prenups only cover the division of assets. A key part of prenuptial agreements does cover “who gets what,” when it comes to assets such as money held in various accounts, real estate, family businesses, valuable items, vehicles, and more, but that’s not all. Prenups also handle debts, detailing who will be fiscally responsible for any loans, mortgages, or other outstanding accounts. In addition, non-financial items are sometimes covered, such as pet custody, social media clauses (to avoid being humiliated online), and policies protecting the sharing of sensitive information after a divorce.
- Prenuptial agreements are only helpful if the couple gets a divorce. Prenups usually address what will happen if the marriage is terminated by death in addition to the possibility of the marriage terminating due to divorce. It can set out your wishes for your finances and assets, which can be used as a reference in the estate planning context. It can also be used as a means to set out financial expectations during the marriage as well, such as how property will be acquired or how earnings will be spent throughout the relationship. Some prenups even set forth conduct issues. We do not advise that the prenup agreement be the sole estate planning document or that it govern how you will behave during the marriage, but some couples insist upon it.
Hopefully, you have a better understanding of prenups at this point. If you strip away all of the mainstream hype and confusion around them, they truly are just smart legal tools to secure your financial well-being. Let us help you avoid common prenup mistakes and get your affairs in order before you tie the knot. If you’re already married, we can still help by drafting a postnuptial agreement instead. Contact Cecelia Neihouser Harper at 765-637-9175.
The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.