A prenup does not mean a lack of trust in your relationship. Prenuptial agreement is a legal and practical way of dealing with issues that may arise if you decide to end your marriage in the future. If your partner and you are considering getting a prenup done, then this article will surely help you both make a wise decision.
Understanding prenuptial agreements
Prenuptial agreements or prenups simply mean agreements in which the parties who are planning to tie the knot decide to disclose their respective assets and share a vision of how to handle financial matters throughout their married life. In addition, matters related to inheritance, business, debts, etc. are also covered by prenups, which make them very useful and important in today’s world. By signing a prenup, you both basically agree not to touch each other’s assets and money if you ever get a divorce.
Prenups are usually signed by couples if one of the partners
- Owns some real estate property
- Owns assets like multiple bank accounts, stocks, shares, etc.
- Has decided to keep a child from a previous marriage with him/her
- Has decided just to support a child from the previous marriage
- Owes huge amounts of debts
- Has inherited a lot of money
12 pros and cons of prenups that should be weighed
Although prenups have become quite common among the young couples these days, there are still some who are very hesitant when it comes to actually discussing and signing one. Therefore we are going to discuss 12 pros and cons of prenups so that your partner and you can make a well-informed decision regarding a prenup.
1. Discussion of financial matters
Financial conflicts in a marriage are more common than we think. Money matters can actually break a relation and a family.
Pros: Prenups give both of you an opportunity to discuss financial matters in a frank and straightforward way, so that you both get to know what to expect from married life in terms of finances. A prenup can also allow you to get rid of a partner who is just marrying you for your money.
Cons: A discussion about financial matters might lead to misunderstandings between your partner and you, which you both might never be able to resolve. Not every couple is able to negotiate about finances clearly and achieve success in signing a prenup.
2. Impact on the relationship
Not everyone may agree to the idea of a prenup having a positive influence on a relationship. It is quite a subjective view.
Pros: Prenups usually tend to have a good impact on your relationship, because you both get to know each other’s views on money matters and are able to trust each other more.
Cons: On the other hand, a prenup might damage your relationship if your partner is not willing to sign it and thinks that you do not trust him/her completely.
3. Maintenance of your children’s finances
Prenups do prepare you for the unfortunate things that happen in life.
Pros: With the help of a prenup, you can ensure that in case of a divorce or death your children (whether from previous marriage or current marriage) can get their share of finances legally and rightfully without any hassle.
Cons: There may be other laws and rules already enforced in the country which might govern matters like child support, etc. So the prenup you had signed might actually become null and void because of those prevalent laws and rules.
4. Conflict related to divorce
Divorce is never easy and smooth, prenup or no prenup.
Pros: Since prenups are legal agreements, obviously much of the clauses and issues will be discussed and negotiated with much clarity. Thus even if a conflict arises during the time of the divorce, the prenup you have signed will reduce the conflict accordingly, because everything will be mentioned in it.
Cons: During the time of divorce, along with the other matters, the prenup itself might become a source of conflict and might get on your nerves. The reason behind this is simple: prenups are not always efficiently designed or ironclad. There might be loopholes which might create trouble for you at the time of divorce.
5. Protection of business
When colleagues or partners decide to tie the knot, their vested interests must be taken care of some way.
Pros: When you sign a prenup with your partner, you can make sure that your business (one that you own) can be protected thoroughly and that your business interest is not sabotaged in case of a divorce.
Cons: If your partner owns the business and you have financial interest in it and have contributed to its success, then you might actually not get your fair share from that business after the divorce because of the prenup.
6. Lifestyle pattern
There are no surprises, no hidden treasures and no huge debts that you are not aware of.
Pros: By signing a prenuptial agreement, you both will be able to decide how to spend finances and will be able to come up with an appropriate plan to maintain a particular lifestyle after marriage.
Cons: In case of separation, you might not be able to maintain your earlier lifestyle because you will either have to support your ex or have to receive support from your ex. Under any of the two circumstances, obviously your funds will be limited and your lifestyle will have to be adjusted accordingly.
7. Cost associated with divorce
Divorces are always expensive, no matter which side you are on.
Pros: Prenups cover details regarding how divorces will be handled and how the lawyer fees will be managed. So once you sign a prenup you do not have to worry about these issues if you decide to get divorced in the future. Costly litigation can be swiftly avoided by you, because of the signed prenup.
Cons: However, most of the time the prenup itself is challenged at the time of divorce, which actually does not reduce but actually increases the cost associated with divorce.
8. Professional guidance in planning finances
We all could do with a little professional help.
Pros: For creating a prenuptial agreement, you will obviously have to take the help of an experienced and professional lawyer who specialises in prenups, and legal and financial matters. This means you will get the guidance of an expert in planning your finances and other legal issues.
Cons: Hiring a professional lawyer to create a prenup and guide you in an appropriate manner will require lots of money. You will have to be ready to spend enough money on a prenup lawyer while also managing the finances being spent on your wedding.
9. Debts and loans
No one wants to get into a marital relationship to pay off debts of the partner.
Pros: Prenups tend to include provisions regarding debts and loans, which means you will not be liable to pay back the debts your spouse might have accumulated before marriage.
Cons: If the prenup is challenged or any loophole is found in the court of law in relation to the clause related to debts and loans then you will probably have to share the liability of your partner.
10. Future decisions
There is a legal binding to all your future life. Nothing is spontaneous or sudden, so to say.
Pros: Prenups generally prove to be a guiding light for couples who are going to kick-start their married lives. Through the negotiations related to the prenups, the couples are able to decide the future course of their lives after marriage and thus the prenups turn out to be useful.
Cons: On the other hand, prenups do not actually help anticipate the future precisely, due to which an issue that seems small to the couples in the beginning usually turns out to be monumental in the future. Therefore the couples fail to make future decisions wisely.
11. Rationality in the relationship
The must for a happy, lasting, content relationship.
Pros: By getting a prenup done, you both decide to rationally communicate with each other and create a path for a sustainable and prosperous future together. You do not let emotions take control of your thoughts and rationality becomes the basis of your relationship.
Cons: Even though it seems that couples rationally sign the prenup, it is seen that most couples sign prenups because they are madly in love with each other and do not want anything to come in between. Thus they sign the prenup without much thought and regret it later on.
12. Privacy and control
Keeping things to yourself is not difficult when you have a prenup in place.
Pros: Through the prenup, you are able to make sure that your privacy in married life in terms of finances and assets is respected. You will get the opportunity to use your finances and assets according to your wishes during the marriage and even after a divorce.
Cons: A prenup may give the illusion of privacy and control, but ultimately when the prenup is discussed in the court of law during the divorce, that illusion is shattered. The court of law might invalidate clauses in the prenup and might not uphold the privacy and control that you enjoyed.
The decision to sign a prenup or not to sign one depends on your partner and you entirely. So you both need to honestly discuss a prenup quite early in the relationship and opt for it only if you both think it is absolutely necessary. You both must approach separate lawyers for drafting prenups so that the concern of both parties can be promptly handled. Remember that a prenup eventually means to be prepared for the worst case scenario and it can never go wrong if planned out wisely and effectively.