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Should You Get a Prenup? Everything to Know About Prenuptial Agreements

Mar 5, 2024 2 min read

The thought of signing a prenup before marrying the person you鈥檙e planning to spend the rest of your life with can be difficult to fathom. Prenuptial agreements don鈥檛 have to be a bad thing; in fact it鈥檚 a good time to outline the duties and obligation of each party during the marriage and in the event of a divorce. 

What Does a Prenup Do?

A prenuptial agreement is a written contract which outlines the assets, debts and division of said assets and debts in the case of a divorce. A prenup can also outline the division of future assets. For example, if one spouse stays home to raise the kids while the other partner works, it could be outlined that the stay-at-home parent is entitled to a certain amount or percentage of alimony or spousal support in the event of a divorce due to their lack of work history and financial stability. 

If you live in one of the nine states that follow community property laws 鈥 Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington or Wisconsin 鈥 once you鈥檙e married, all assets are considered marital property (property of both individuals) unless you a have a prenup.

Though a prenup can help split current and future assets, it can鈥檛 define custody or child support.

Who Needs a Prenup?

Depending on what stage of life you鈥檙e in, you may want to consider a prenup if:

  • 滨迟鈥檚 not your first marriage.
  • You have kids.
  • One of you has significant debt (student loans, credit cards, etc.).
  • You own a business.
  • You鈥檙e a stay-at-home parent.
  • You鈥檙e expecting a future inheritance.

If you鈥檝e had a prior marriage that didn鈥檛 have a prenup, you鈥檙e probably aware of how complicated financially adjusting to a divorce can be and, depending on your financial situation, it could have left you financially hindered. 

Additionally, if you have kids, you may want to add a note in the prenup that protects the assets or heirlooms you鈥檇 like them to receive in the future. If you鈥檙e a business owner or shareholder, disclosing that these stay in your name could also ensure you鈥檙e protecting yourself 鈥 and your business. 

Is a Prenup a Good Idea?

If you鈥檙e considering a prenup, the most difficult part is likely having the initial conversation with your partner if you suspect they don鈥檛 feel the same way about it. If you鈥檙e both on board, here are the high-level pros and cons:

Advantages of Prenuptial Agreements

  • Protection from your partner鈥檚 debts
  • Estate planning measures are already in place in case one of you passes away
  • Protection for your assets
  • Streamlined divorce process
  • Clarity on division of responsibilities and assets/debts

Disadvantages of Prenuptial Agreements

  • May not be enforceable
  • The financial balance may shift
  • Family relationships 
  • Prohibitive cost
  • Legal fees and prenup costs

How to Get a Prenup

If you want to start the prenup process, here are a few steps you can take.

  1. Have an Honest Conversation

Talk with your future spouse about wanting a prenup and what security it could provide to both of you in case things don鈥檛 work out.

  1. Get a Full Picture of Your Finances

Sit down together and outline your assets such as any owned properties, vehicles or stocks and debts like any mortgages, loans or credit cards.

  1. Outline the Goals of the Prenup

滨迟鈥檚 important to keep in mind what the prenup鈥檚 role is in your relationship. Is it to mitigate risk, protect assets or provide a guide for estate planning?

  1. Work With a Professional

Once you have an idea of what your finances look like and what you want included or excluded, connect with a legal professional to initiate the prenup process. Individual state鈥檚 laws regarding prenuptial agreements are different. Consider consulting with your attorney to determine the best course of action for you.  

We鈥檙e Here to Help

Whether you have questions about financial planning, estate planning or bundling your insurance policies after you walk down the aisle, we鈥檙e here to help. Connect with a local Farm Bureau agent to get started.

Want to learn more?

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