Why It's a Good Idea to Have a Prenuptial Agreement

Promise your heart — but not your nest egg. The insider’s guide to protecting your hard-won assets and living together in peace (of mind).

By Juliann Garey
Photograph: Photo by: Comstock

Protect Yourself

Before I started researching this story, I bought a whole box of reporters’ notebooks. I assumed that after interviewing the experts on my list — lawyers, leaders of women’s advocacy groups, financial planners, even therapists — all my notebooks would be filled with instructions, rules, strategies, and guidelines, a multifaceted plan for keeping your precious assets safe wherever your life and, more specifically, your love life, might take you.

I was wrong. One lonely word appeared on the page, the same word I’d heard over and over. The uncontested winner when it came to asset protection was…"prenup."

I told the experts I wasn’t writing about divorce, that this was a story for women who wanted into, not out of, relationships. A story for women who have careers and stock portfolios and 401(k)s and great credit and stuff they worked hard for — and who want to protect all of it. And what about second marriages, not to mention children from previous marriages? Is it less complicated just to live together? I wanted financial advice for women in their 40s who are marrying for the first time, 30 percent of whom would be earning more than their husbands. And how does a woman, long-married or not, protect money she’s inherited or expects to inherit or wants her children to inherit?

I told them I was writing for women who have a lot at stake. They listened. They nodded. And they said "prenup."

Courtney Knowles, of the Equality in Marriage Institute, says women should think of a prenuptial agreement as an all-purpose safety measure. "Here’s a simple analogy," he explains. "Every day when we get in the car we put on a seat belt. Not because we’re convinced we’re going to crash that day, but because we’ve learned accidents happen."

He has a point. Eighty percent of Americans buckle up before they hit the road, but anecdotal evidence suggests that only 5 to 10 percent of us sign prenups before walking down the aisle. Since 50 percent of all marriages and 60 percent of second marriages crash and burn, clearly driving is the safer activity.

Yet when Teresa Heinz Kerry declared, "You have to have a prenup," the vast majority of American women went, "Nuh-uh." More American women than ever have their own money. They’re marrying and remarrying, inheriting and blending families. Sure, they want to keep what they’ve got when they marry or remarry; they just want to do it without a prenup.

But here’s the rub: Unless you take specific action to protect what you’ve worked for, your spouse might be able to lay claim to half of your worldly goods should you decide at some point to divorce.

Though you can’t make your intentions legally binding without putting them in writing, there’s still a lot you can do to protect your assets as if you had a prenup. The first and most important item is understanding the distinctions between what’s yours alone and what belongs jointly to you and your partner. Knowing those differences and setting up a system to protect what you’ve got (whether you’re just starting out or coming late to the game) can ultimately mean the difference between living on your own financial terms — or at the mercy of someone else’s.

Come Clean

When two people start a relationship in their 40s, 50s, or 60s, they’re likely to bring a lot of financial baggage to the union. "Number one, full disclosure," says Harriet Newman Cohen, a divorce lawyer whose clients include Patricia Duff, Alison Stern, and Andrew Cuomo. You have to be willing to show each other exactly what you’re packing: assets, liabilities, debts, credit reports, loans, insurance policies, property deeds. Discussing financial particulars will undoubtedly be a mood-killer, but it’s crucial that you persevere. If the guy you’re about to marry is avoiding the money conversation before the wedding, he’s probably sending a warning about your future. Heed it.

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