Financial Advantages and Disadvantages of Prenups

financial advantages and disadvantages of prenups
Written by Oana Schneider

Getting married is considered to be one of the most important (and most stressful) events in one’s life. Aside from the fact that a marriage should always be based on love, respect and commitment, there are other aspects to consider as well. For instance, a marriage’s financial aspects should be taken into consideration as well. Of course, marriage is not a business – but it is a partnership where all finances are shared in equal manner.

While not until very long ago signing a prenuptial agreement was something restricted to the elites, these days more and more couples choose to create such a contract before the big “I Do”. Like with everything else in the world, this comes with advantages and disadvantages – both regarding the financial aspects of the contract and regarding other aspects as well. Before you sign anything, you should make sure to get familiar both with the benefits and with the less beneficial features of such a contract – so that you can make the best decision for yourself and for your relationship as well.

So, what are the main things to take into consideration before getting a prenup? Read on and find out more.

What Is a Prenuptial Agreement, More Exactly?

Put in very simplistic terms, a prenuptial agreement is a contract signed between two future spouses before getting married. In most of the cases, the contract includes “rules” on what should happen in the case of a divorce – and most of these rules are related to legal and financial actions.

Of course, it may sound a bit “un-romantic” to even spell out that there is a chance a couple would get divorced. However, the truth is that signing a prenup is a very sound financial move to make. After all, studies do show that more than half of the marriages eventually end up in divorce – and while you definitely do not want the same for your own marriage too, it is important to discuss with your partner what exactly happens in the eventuality you decide to split up.

A prenuptial agreement is a mature and rational thing to have before saying “I Do” – and more and more couples these days decide to go the “sensible” way when it comes to this precisely because there are many things at stake when making such a huge change in your life (and in the life of the people surrounding you, for that matter).

What Are the Main Benefits of Having a Prenup?

As mentioned before, signing a prenuptial agreement does come with its own series of benefits – and you should absolutely take all of them into consideration before making any kind of step in this direction. Here are some of the most commonly encountered advantages of having a prenup:

1. Previous marriages and children. These days, there are many people that come into a marriage with a “history” behind them. A prenuptial agreement can help you protect your children from a previous marriage (or your children even if they were not born into an actual, legal marriage). Different states have different laws when it comes to inheritance and a prenup can state very clearly what part of your assets should go to your children from a previous marriage should anything bad happen to you. Again, this is not the most optimistic outlook, but being safer is always better than being sorry.

2. Previous businesses. If either one of you (or both of you, for that matter) come into the marriage with a well-established business, a prenup can help you protect it in the eventuality of a divorce. This way, you make sure that everything you have worked for stays intact and that your interest is protected if something happens and you and your future spouse decide to legally separate.

3. Previous debt. Some people come into marriages with a considerable amount of debt on their names. Signing a prenup can help you protect your future spouse from sharing the same amount of debt with you if a divorce occurs in the future. Likewise, it can help you protect your spouse from the debt of a newly-created business as well.

4. Protecting family heirlooms. When presented in the movies and TV shows, prenups are usually signed between someone with not so many financial resources and someone who comes from a family with a lot of money. While you or your spouse may not be extremely rich, you may still have family heirlooms, legacies and assets you may want to protect from being shared with someone from outside of the family in the case of a divorce – and this is a perfectly fine thing your future spouse will most likely understand.

5. No conflicts. A prenuptial agreement can also avoid long and impossible conflicts in the eventuality of a divorce. Because most of the terms have been laid out, there will be little to discuss in court.

6. Spousal support. Not all states have very clear laws when it comes to how much a spouse should be supported in the eventuality of a divorce. A prenuptial agreement can help you and your spouse establish clear terms even if the state laws are not 100% clear – so that you can both find a middle-way solution that works well for everyone.

What Are the Main Disadvantages of Having a Prenuptial Agreement Signed?

As it was also mentioned in the beginning of this article, prenups come with their fair share of disadvantages too – and they are definitely to be taken into consideration before anything is laid out. Here are some of the most common “cons” of having a prenup:

1. The non-financial aspects. One of the main reasons some people choose not to sign a prenup is because it automatically implies that the marriage that has not even started already could end at any time. Of course, this is a grim outlook and many people would much rather choose to simply not think of such a probability.

2. The future is not 100% predictable. No matter how much we don’t like this, our futures are not 100% predictable – and when circumstances change, the prenups have to be updated as well. Otherwise, a prenup can turn into the exact opposite of what it was supposed to be: an extra complication brought to an already stressful divorce.

3. Lifestyle changes. In some cases, signing a prenup can also mean that you, your future spouse or both of you will have to make changes in your lifestyles. And this is something not many people are ready to put up to – so make sure to keep it in mind before signing a contract.

4. Prenups are not always 100% steady. In other words, they can be debated in court if a judge chooses to do so. Of course, a specialized attorney can help you avoid any potential such issues, but it is worth knowing that this could happen, especially under certain circumstances.

As you have seen, there are many things to consider when signing a prenup. Sometimes, prenups are both about protecting yourself and about protecting your future partner. Other times, they are disadvantageous for both sides. Think of all these things and decide on what is best in your particular situation.

About the author

Oana Schneider

Oana Schneider is a published author located in Chicago, Illinois, who currently works for as a communication specialist and blog editor. She writes about lifestyle, family budget, has a degree in Communications and advocates for women’s rights. Her future plans include getting a Labrador and losing a few pounds.

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