Brian Page, is doing wonderful work on improving marriages in his website, Modern Husbands. Here’s the second article I wrote for him – “Should We Really Have a Prenup? (Part II.) Brian is the founder and webmaster of a wonderful website Modern Husbands. The article (see below) is basically a summary summary of part of the video podcast we taped in September, 2023 for Brian’s Modern Husbands Podcast Series. My interview podcast in which I expressed my views on the dangers and opportunities of prenups is entitled “Money, Marriage and Prenups.” You can view the entire video podcast on my media page). .#prenups#moneyandmarriage#healthyprenups
My basic message is this:
Don’t believe everyone should get a prenup before marriage. Prenups are very useful in certain situations, but in most cases they cause more harm than good.Part of the problem is that their terms are created by young people who have not experienced what’s needed for a long-term marriage.
They often show a lack of love and caring and provide an easy way out when a couple hits the first bump in the road in a long-term marriage (which will happen—just like a motorcycle accident – it’s just a matter of time when it will happen).
But there are a number of good reasons to enter into a prenuptial agreement prior to marriage.
Wealthy family. This is not a bad thing but can throw a wrench into a marriage if the benefits of being the recipient of the familial wealth, are kept on one side of the marriage only. Couples can plan in a prenup how they will deal with such a situation. Just ignoring the situation won’t work.
High level of premarital assets. A prenup can take out the uncertainty of what might happen to the prenuptial assets if there is a divorce. It can also provide a vesting schedule for premarital assets to eventually be shared in a (hopefully) long-term marriage, where blending of all assets are often in order.
Ownership in a business. When someone owns (whether whole or in part) a business, a divorce can disrupt the possible ownership interest of that business. Prenups can set terms to insulate a particular business interest in the case of divorce. It is equally important that the prenup defines the terms for sharing the income generated by and addresses any increase in the value of such a business which is generated by a spouse’s active participation in the business during the marriage.
Figuring out how to pay premarital debt. In most cases, premarital debt is the separate responsibility of the person who incurred it. But the act of paying the debt off will leave less income for that person to pay for living expenses and accumulate marital wealth and marital financial security (which is one of the aims of marriage). Often the educational value of obtaining a student loan was crucial to the higher earning power of the person who incurred it. So why not view it as a joint marital expense?
Planning finances and full disclosure before marriage. This can be done without a prenup but can be part of the prenup process. It’s important to have a full picture of both of your assets and liabilities before you marry. There might also be some clarifying information (such as understanding of family trusts) that would be helpful at that point.
Second Marriages with children from the first marriage. This is one of the most common reasons for having a prenup. People want to show loyalty and financial caring for their new spouse, but also often wish to provide for the children of their first marriage after their passing., A prenup can help a couple plan for this and provide a secure and sound (and balanced) solution that will benefit both of the spouses as much as might be needed in their situations, as well as providing for a legacy for the children of their prior marriages.
Providing estate planning commitment. Marriages always end. Either in divorce or death. Anyone can change their estate plan the day (or the hour) before their death. Planning for what happens after one of the spouses dies, especially if it is a second marriage, is a very important factor in maintaining a feeling of financial security and fairness between the spouses. A prenup makes whatever the estate plan’s provisions are as put forth in the prenup, a legal commitment. Otherwise it isn’t and can be changed at any time.
Setting a legal process in case of a divorce. Many of my prenup clients are survivors of very ugly, protracted, and expensive (if a court contest is involved) divorces. A prenup can set up the process through which the marriage can be terminated without going through litigation. The prenup can set up a pecking order for this process, beginning with mediation, then using collaborative law, and finally ending with binding arbitration if needed. This can give people who are marrying a much greater peace of mind.
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