Getting Married? Prenups Aren't Just For the Rich and Famous

I know people moan and groan about pre-nups, and at first blush, it’s easy to see why. A marriage is supposed to last forever, so managing its potential dissolution is hardly romantic.

It’s not candy and flowers.

They get a bad rap, but it’s not your mother’s pre-nup. A marriage is a contract, and a prenuptial agreement is putting finer points on that contract. It’s a legal agreement that specifies how couples will divide assets in the event of divorce. They’re not just for billionaires; They’re put in place to protect both parties; and with so much about gay marriage in the news, I also have to mention that they’re not just for straight people.

Historically, pre-nuptial agreements were for wealthy people who needed to protect extensive assets, a business or investments. But more and more middle class people are drafting prenups. A 2011 survey by the American Academy of Matrimonial Lawyers found that prenups had increased 73 percent over a five-year period. And this is interesting—more women are requesting them.

What do you attribute to the rise in popularity?

For one thing, an ailing economy has people thinking about money more. We all know that statistic about 50% of marriages ending in divorce (a trend that’s actually lowering), so people are being a little more realistic about a possible split. And  people are getting married later in life. The average age of first marriage in the United States is 27 for women and 29 for men, up from 23 for women and 26 for men in 1990 and 20 and 22 in 1960. Because they’re getting married older, more people have actual assets they want to protect in the event the relationship goes south.

But what if both the bride and groom to be have no assets?

Great question. You can’t take half of nothing, right? Not so! In fact, you can end up taking half of less than nothing—meaning your spouse’s debts could haunt you. And again, I want to point to that rising age of newlyweds—more and more people are taking liabilities to the altar—like credit card debt and student loans. It makes perfect sense that spouses would want to protect each other from any liability one has going in. You’re saying “I do”, not “I owe.”

Also, you probably have some assets you haven’t thought about that you’d like to keep separate—like a retirement plan or an expected inheritance. Or what about property your parents may pass down to you and your siblings?

Start talking about it as soon as you get engaged. This shouldn’t be a last-minute request for a signature outside the church. If you’re recently engaged, this is the perfect time to bring it up because you can use your taxes as an excuse. Next year, you’ll file jointly, so even though it’s uncomfortable, I suggest you exchange returns as a way to start the conversation.

Isn’t it expensive?

You get what you pay for. According to a new study by The Wedding Report, the average engagement ring costs over $3,300. By comparison, the attorney fees for a pre-nup will probably start at about $2,000. You’ll need to contact a family attorney and both you and your betrothed will both need your own lawyer. Don’t try the do-it-yourself route on this one. Your cousin the notary is not going to cut it. Anything you draft on your own will not stand up in court.

There are some online resources if you’re very concerned about costs and just need a simple agreement. For example, Legalzoom.com has a “prenup package” that starts at $600.

Any other tips?

Absolutely. When preparing a pre-nup, you’d of course address any property, retirement accounts, and any debt. But you should also consider sentimental belongings like furniture and other non-traditional things like pets. Sorting it out now could save you a major headache in the future.

Also, even if a couple doesn’t draft a formal prenuptial agreement, it is critical that they have a completely honest discussion about finances prior to the “I Do’s.” That means coming clean about any outstanding debts and setting some parameters about how you will manage your finances as a couple.

Many studies cite financial issues as one of the top causes of divorce—right alongside communication problems and infidelity. Why? Frequently, couples don’t realize they have very different values around money until they’ve tied the knot and co-mingled their accounts. Don’t make that mistake! If it’s a June wedding, first go for the April pre-nup.

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