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The Importance of Prenuptial Agreements


4 Benefits of Having a Prenup in Place

No one gets married with the idea that they’ll one day get divorced. However, the reality is that 40% to 50% of marriages end in divorce. The divorce rate is even higher for second marriages, at 60% to 70%.1

One way to protect yourself and your assets from the financial pitfalls of divorce is by establishing a prenuptial agreement. While a prenuptial agreement’s main purpose is to ensure your assets are distributed fairly in a divorce, there are several other benefits to having this type of document in place before you head down the aisle.

#1 – A prenup encourages pre-marriage financial conversations

It can be difficult to talk with your soon-to-be spouse about financial issues, but discussing a prenuptial agreement can be a way to open the lines of communication. For example, through your prenup discussion, you and your partner may decide that you’ll maintain a joint bank account to pay for joint expenses while also holding a certain amount of assets in individual accounts to use for personal spending. This allows each spouse some financial autonomy while also addressing shared financial goals.

The prenuptial agreement discussion can also help you agree upon financial responsibilities, such as who will pay what bills and how much you plan to save each month.

Perhaps even more importantly, from a family legacy perspective, if you’re the patriarch or matriarch of your family, discussing family legacy and the role a prenup very early on (before there is even the hint of a significant other) helps establish a family mission statement and an intent for wealth that can make the discussion much easier once there is a significant other in the picture.

#2 – A prenup simplifies the divorce process

As the divorce process progresses, many couples find themselves arguing about how assets should be divided. This can add additional stress to an already difficult and emotional event. It can also lead to costly legal fees as you battle each other for various assets and accounts. A well-drafted prenuptial agreement allows you to quickly resolve many common legal issues that cause further emotional distress in a divorce while also reducing your divorce-related expenses.

#3 – A prenup protects you from debt

Without a prenup in place, a portion of any debt your spouse brings into the marriage may end up being your responsibility following a divorce. If your partner has higher debt than you, it’s important to protect yourself. A prenuptial agreement can keep your partner’s debts separate from your shared assets and prevent them from being transferred to you in case of divorce.

This debt protection is especially important if you live in a county, parish or state where assets and debts are considered to be jointly owned by both spouses.

#4 – A prenup protects your family and business

A prenuptial agreement protects not only you and your assets but also your children and business. If you have kids from a previous marriage, a prenup can allow you to designate certain assets to them. This helps ensure their financial interests are protected should you get divorced. Similarly, if you own a business, you can designate it as an individually owned asset in your prenup. This helps ensure you won’t be forced to liquidate your business in case of divorce, further enhancing your family legacy planning and reinforcing the importance of having these discussions as a family early on.

The prenuptial agreement conversation can be a difficult one to initiate, but it can also help you get on the same page as your spouse and protect each of your interests should your marriage not work out.

If you could use some help with your prenuptial agreement, Creative Planning is here for you. Our teams of wealth advisors and estate planning attorneys work together to help ensure your various legal interests are well cared for and integrated into your overall financial plan. For more information, schedule a call with a member of our team.


  1. https://www.petrellilaw.com/divorce-statistics-for-2022/

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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