BiggerPockets Money Podcast
301: Why You’re (Probably) Wrong About Prenups
Episode guests
Podcast summary created with Snipd AI
Quick takeaways
- Prenuptial and postnuptial agreements provide transparency and fairness in managing finances during marriage and in the event of a divorce.
- Including provisions for marriage counseling in prenuptial or postnuptial agreements can facilitate open communication and conflict resolution within the relationship.
- Prenuptial and postnuptial agreements help protect both spouses' financial interests, establish clarity and trust in their financial partnership, and save costs associated with divorce proceedings.
Deep dives
The Importance of Financial Planning Before Marriage
Marriage is considered the biggest financial decision a person can make, even more significant than buying a house. Planning and discussing finances before getting married is crucial to avoid future financial issues.
Understanding Prenups and Postnups
Prenuptial agreements and postnuptial agreements are written documents that outline how a married couple will handle their finances, both during the marriage and in the event of a divorce. These agreements provide transparency, communication, and fairness when it comes to managing money.
Benefits of Prenups and Postnups
Prenups and postnups can benefit couples in various ways. They can dictate how finances are managed during the marriage, such as setting up separate accounts and discussing joint expenses. These agreements can also address financial disparities between spouses, ensuring a fair distribution of assets and debts. Additionally, postnups can serve as a reset, helping couples resolve financial issues and strengthen their relationship.
Importance of Communication and Pre/Post-nups
Effective communication between spouses is crucial, and it cannot be emphasized enough. It is important to have open conversations about various aspects of the relationship, including finances. One way to address financial matters is by including provisions in prenuptial or postnuptial agreements that go beyond strictly financial matters. For example, couples can include provisions for marriage counseling in these agreements, allowing either spouse to trigger counseling sessions. This helps ensure that both individuals are committed to addressing any issues that may arise throughout the marriage. By agreeing on these provisions ahead of time, couples can work towards resolving conflicts respectfully and avoiding costly legal battles.
Benefits and Importance of Prenups/Postnups
Prenuptial and postnuptial agreements are valuable tools for protecting both spouses' financial interests, regardless of their current wealth. These agreements allow couples to set clear guidelines on how finances will be managed during the marriage and how assets will be divided in the event of a divorce. By discussing and documenting these matters in advance, couples establish transparency, clarity, and trust in their financial partnership. They can determine how joint expenses will be paid, plan for shared financial goals, address concerns about separate assets and debts, and outline fair allocation of assets in case the marriage ends. These agreements offer peace of mind, save costs associated with divorce proceedings, and provide a framework for a respectful and equitable separation if needed.
Asking for a prenup (prenuptial agreement) can be an exceedingly scary ask. To your partner, a prenup may seem like a way of telling them that you’re planning for a future divorce. But, in reality, it could be the thing that secretly saves your marriage. The everyday American knows very little about the prenuptial agreement and has gotten most of their information from movies, reality TV shows, and hearsay from friends and relatives. We wanted to know the truth about prenups, so we invited attorney Aaron Thomas on the podcast.
Aaron Thomas has a wide range of experience in family law, divorce law, and anything that comes from legally joining (or separating) a couple. He knows how difficult divorce cases can be and saw the same mistakes repeated by couples. The lack of communication over finances, minimal planning (if any at all), and wishful thinking led to more and more couples seeking separation shortly after marriage.
Now, Aaron and his team work with couples to form strong prenuptial and postnuptial agreements so that they have a rock-solid financial foundation to stand on when dealing with the daily joys and struggles of marriage. Aaron argues that the prenup may be the most important step in mitigating a divorce and that the protection of a prenup goes far beyond wealth. If you never thought about getting a prenup or postnup before, you definitely will after this episode!
In This Episode We Cover
Prenuptial and postnuptial agreements explained and what they protect
Added stipulations in a prenup that most couples don’t know about
The optimal way to combine finances as a couple and how to split uneven paychecks
How to bring up a prenup or postnup to a partner who’s feeling averse to one
The cost of divorce vs. a prenup and why you DON’T want to leave a legal separation up to state laws
Which couples shouldn’t look into signing a prenuptial or postnuptial agreement
And So Much More!
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