Prenuptial Agreement Benefits and Drawbacks

Here's a quick glance at the pros and cons of premarital agreements.

If you're thinking about making a prenuptial agreement, it can be helpful to look at the most common advantages -- and challenges. We'll look at the good news first, then we'll talk about a few downsides.

Prenup Benefits

Making a prenup can:

  • protect your separate property
  • support your estate plan
  • define what property is considered marital or community property
  • reduce conflicts and save money if you divorce
  • clarify special agreements between you, and
  • establish procedures and ground rules for deciding future matters.

These points are discussed in more detail in Nolo's article Prenuptial Agreements -- What the Law Allows.

Making a prenup may actually strengthen your relationship. While people often imagine that negotiating a prenup leads to conflict, communicating about money matters can actually improve the quality of your relationship and support good communication in your marriage. Even if you don't end up signing a written agreement, talking frankly about money and property can eliminate misunderstandings that might otherwise crop up between you. Remember that sooner or later, you and your intended will be discussing money. If you think you can handle it, most psychologists and legal experts would tell you there's no time like the present.

Disadvantages of a Prenup

While there is a lot to be said for a carefully considered, clearly written prenup, there are some downsides to consider.

It's not romantic. Let's face it, a prenup is not romantic. Being engaged conjures up images of candlelit dinners and walks in the moonlight. Although marriage is a financial partnership as well as a romantic one, if you feel that discussing something as mundane as property and finances, as well as the possibility of divorce, will mar an otherwise beautiful time of your lives, you may not be candidates for a prenup.

The time may not be right. The need for a prenup is partly a question of timing. The issues covered in a prenup will probably arise sooner or later in your marriage: money management, property rights, responsibility for debts, estate planning. And if your marriage doesn't work out, you'll certainly need to deal with divorce decisions.

But making a prenup forces you to confront many of these issues now, at a time when your relationship may still be new and untested. Discussing what goes into a prenup could be unpleasant and stressful, leaving one of you with bad feelings about the relationship. (If now is not the time to make a written agreement, you may be able to make a contract after you marry (a "postnup"); but postnups have their own disadvantages, including stricter legal rules.)

State law may protect you without a prenup. The laws of your state may do a fine job of accomplishing what you want. For example, you may live in a community property state where assets owned before marriage are separate property and those accumulated during marriage are community property that is owned fifty-fifty. If this is essentially what you would want in your prenup, or maybe even better than what you expected, why go through the work of negotiating a prenup? Still, you'll want to be sure that you're not facing any special circumstances where your state law is unclear.

If you're leaning toward making a prenup and feel ready to consider specifics, the next step is to take a careful look at your own situation. See the article Is a Prenuptial Agreement Right for You? Or, get Prenuptial Agreements: How to Write a Fair & Lasting Contract, by Katherine E. Stoner and Shae Irving (Nolo). This book helps you from start to finish: from deciding whether a prenup is right for you, to negotiating and drafting the agreement.

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