Why you May Need a Prenup

When you think about prenups you commonly thing about wealth and asset protection, but they can actually be useful in any marriage. Some of the benefits of a prenup are as follows:

TRANSPARENCY

Financial problems are a leading cause of divorce. Taking some time to review your finical standing with your significant other prior to marriage can help you understand the total financial picture. You can see what things they are bringing into the marriage, like student loan debt, and make decisions about what happens to them if you were to divorce.

FINANCIAL PLANNING

Talking about assets and debts also can start a conversation about financial planning. What kind of emergency fund do you want? How much do you want to put towards retirement? Do you want to keep a joint bank account or have separate? Having this conversation before you are married is important whether or not you decide to enter into a prenuptial agreement.

FUTURE INHERITANCE

Do you anticipate receiving any large inheritance such as an interest in a family business or money from a relative. It is imptoarnt for you to talk about how you would handle this if it occurs.

DEBT

A prenup can also help protect you from debt. For instance if your partner goes to law school or medical school you can use a prenup to predetermine that the debt would not be a part of the marital estate. Or you can make a prenup that states that each of you would be responsible for any credit cards in your own name.

DIVORCE

This conversation can also help you talk about how you would handle divorce in the future. You can talk about how you would want to treat each other and how you would handle different financial affairs or custody. Ultimately, a prenup can help you lay out a smart well-rounded plan on how you would handle a divorce. They can also help you start talking about some of the big finical issues that lead to divorce, which in a way can help you have a more resilient marriage.