Benefits of a Prenup (And Why Wanting One Shouldn’t Start an Argument)

Nothing takes the romance out of an upcoming wedding quite like talking about divorce. It’s the main reason so many people avoid a conversation about filing a prenuptial agreement – the legally-binding document that stipulates how a divorcing couple will divide their assets. Who wants to talk about possibility of ending the relationship before the marriage has even begun? Nobody does.

Despite the somewhat awkward discussion involved, a prenup can benefit a couple greatly – even if both partners have few assets before they get married. Some of these benefits are listed below.

1. Protecting Property from Being Unfairly Divided

Divorce law varies from state to state. California, for example, is a "community property" state, which means the court will divide in half all property acquired during the marriage – called marital property – if the parties cannot come to a better agreement. Pennsylvania, on the other hand, is an “equitable distribution” state, meaning the court will distribute property acquired during the marriage between the two parties based on what it deems fair. Without a prenuptial agreement, everything a couple owns could essentially go on the chopping block if they divorce.

2. Protecting Property Owned Before Marriage

One partner may own a home or other property before marriage. A prenuptial agreement could determine whether or not the partner would have sole ownership of the property and/or be responsible for maintenance costs and other related expenses after divorce. Prenups can also pre-determine decisions with regard to trust and education funds, retirement funds, heirlooms, family property, inheritances and more – even if you don’t know about them at the time. A prenup can also ensure children from a previous marriage inherit specified property.

3. Protecting Against Debt Obligations

A prenuptial agreement can protect one partner from the other’s debts – including loans, credit card debt and more. One spouse may have staggering student loan debt for an education that led to a high-paying job that benefited the couple, for example. Without a prenup, some courts might determine the other spouse is still responsible for helping to pay back those loans after the divorce. A prenup can also limit a partner’s debt liability in the event the other partner is in debt and creditors are seeking the marital property.

A prenup is a sort of insurance policy. Just like homeowners’ insurance protects a person’s home in the event it sustains damage, a prenuptial agreement protects assets in the event a marriage ends. Neither scenario is expected, but having coverage beforehand can make the situation simpler if the unexpected does happen.

No one wants to think there’s a chance their marriage will end, or that dividing assets will get ugly if it does. The topic doesn’t need to have negative implications, however. Discussing how you would prefer to keep and divide assets when you’re in a good place in the relationship can facilitate honest communication about finances in general – what you have now, what you want for the future, and what you would expect from your partner if certain situations arise. It won’t be as easy to talk fairness down the road if you’re also talking about splitting up.

A prenuptial agreement is smart for any couple talking about getting married. Bringing it up should never be offensive; rather, it should be seen as a demonstration of good future planning. Coming to an agreement about your assets and property, whether before or after seeking attorneys, will demonstrate feelings and beliefs the two of you already share as well as any surprises that may come up. Both are important things to know before you tie the knot.


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About the Author: Thomas Petrelli, Jr is managing partner at Petrelli Previtera Schimmel, LLC at 1845 Walnut Street, 19th Floor, Philadelphia, PA 19103. Call to discuss your specific situation at (215) 523-6900.