Should I Get A Prenup (or Postnup)?
A prenuptial agreement (“prenup”) is basically a contract between two people who are intending on being married. This is an agreement that states, among other things, what would happen to the assets that each had prior to the marriage, in the event of a divorce. A postnuptial agreement (“postnup”) is basically the same thing, just signed after the marriage occurs.
Romantic, right?
Prenups are often seen as being something that only occurs among the ultra-wealthy, or something foisted upon a wealthy businessman's third or fourth trophy wife. A way for the one rich partner to ensure that he won't be divested of his wealth should he and his new wife divorce.
In other words … people don't generally have a positive reaction to the concept of a prenup (or a postnup for that matter.)
Maybe that reaction is mistaken.
What if we were to rethink this altogether?
Let's take marriage out of the equation for a moment. Let's put this in a context that is also familiar, but less infused with pre-conceptions. For example, when taking a new job, it is not uncommon for companies to offer certain new employees employment contracts or offer letters. Generally these set forth the compensation and benefits terms, the expectations and job responsibilities, and other terms relating to how the employment relationship is expected to work. They often include a clause about what should happen in the event of a separation: what happens if it is a termination for cause, what happens if the employee wants to leave voluntarily, will there be severance pay, etc.
Does this form of agreement strike you as inherently offensive? Generally speaking, the only time they are “offensive” is when one side holds all the cards and is not willing to negotiate or budge at all on terms that are detrimental to the other side. But as a concept, having an agreement from the outset is a great way to memorialize what both sides' expectations are going into the relationship, which greatly minimizes misunderstandings and conflicts down the road.
Now, step it up a notch. How about a business partnership. Between good friends. Anyone with any experience with such things knows that a good agreement from the outset is far more likely to result in a successful partnership, AND to a continued friendship, even if the partnership is not successful. The lack of agreement … because they're such good friends … often portends disaster.
In general, when two parties can come to agreements – and then memorialize them in writing – before bad things happen, this can significantly reduce the chance of any later conflicts exploding, and may prevent them altogether.
Nobody wants to think about bad things happening at all – especially when you're in the happy-dappy wedding planning or honeymoon phase of things. But being willing to be a grownup and openly talk about the issues itself has the potential to strengthen your relationship.
Money is one of the biggest areas of conflict in marriages. If one or both of you has some amount of assets – whether from family wealth or because of your own efforts – talking through expectations is crucial.
When (not if) there are conflicts down the road, having both spouses in a place of more certainty, and less fear of the unknown, often creates the conditions to work through and beyond the conflict. Yes, prenups can prevent divorce!
Maybe we shouldn't call it a pre-nup. How about a “pre-marriage agreement?” Does that sound better? It really just means talking to your fiancé(e) about difficult issues – finances, divorce, assets. The more you can talk through the what-if's about these issues, the more you're likely to come to an understanding of what the other person is thinking, and come to agreements about what your mutual expectations are.
The truth is that many want to avoid this conversation because they're actually worried that they may not see eye to eye now on these things. Do you think it's likely to get better later on?
This is why it makes sense sometimes to have this conversation facilitated by a professional who understands the fears, and how to use this as an opportunity to bring the couple closer. This is the first step to what everyone hopes will be a life-long partnership. Now is the time for eyes to be wide open.