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Is a prenup worth it?

While individual circumstances vary, prenups can be very much "worth it" for most people, even without wealth.

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If you’re riding the high of wedding planning, broaching the subject of creating a premarital agreement with your significant other might be the last thing you want to do. Besides that, you may even wonder if a prenup is worth the cost—and wouldn’t that money be better spent on something more fun, like your reception shoes?

The truth is, while it of course depends on your individual circumstances, priorities and interests, prenups can turn out to be very much “worth it” for the majority of people. Even if you’re not wealthy.

That’s right: Prenuptial agreements aren’t solely for the 1 percenters, and can be hugely helpful (and oftentimes a true lifesaver) for people in every tax bracket. If any of the below situations apply to you or your significant other, you may find that it’s worth it to sign a contract before walking down the aisle.

If you have any kind of debt

‍Millennials in particular have loads of debt. In fact, only 28% are debt free. If you’re engaged and are bringing debt into your marriage, a prenup can help set out responsibility for those payments and insulate you from a spouse’s debt (or vice versa). Beyond that, a prenup requires a detailed listing of assets and liabilities, which ensures everything is exposed and accounted for before you sign the dotted line.

If you work for a start-up

‍Assets like closely held business interests or stock options can be difficult to value—and that can create confusion and a lot of questions in the case of a divorce. You can use a prenup to spell out what valuation method would be used for such assets. So if you’re engaged and working at a potential future unicorn, take note.

If you have a blended family

‍According to Pew Research, the number of remarried adults has tripled since 1960. And prenups can be a very useful tool in second or even third marriages to set the structure of estate planning. For example, one party can agree in the prenup to waive what portion of the estate they might automatically be entitled to under state law—which can help protect children from a previous marriage.

Whether any of these situations applies to you or your significant other, it’s clear that there are many uses for a prenup. And beyond the idea of protecting your future assets, the true benefit of creating a prenup with your significant other is that you’re creating certainty for you, your spouse and your relationship. You’re removing questions and confusion from your marriage, so you’re free to focus on what marriage is all about: love and happiness.

Sources: Bineham & Gillen Law, 2022, Real Estate Witch powered by Clever, 2022, CNBC, 2015

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