Last week, I discussed how we might advise Taylor Swift and Travis Kelce on a prenuptial agreement if they resided in Texas. But prenups are not just for celebrity couples with substantial fortunes.
This week, we are breaking down three common prenup myths and explaining why prenuptial planning can benefit couples in many different circumstances.
Classic romantic films often end with the happy couple getting married and living happily ever after. However, the truth is that not every marriage gets its happily ever after. That is why we recommend prenuptial planning.
Unfortunately, the word “prenup” conjures up negative connotations. Many people view them as unromantic, unnecessary, or beneficial to only one spouse. I am here to separate fact from fiction and challenge some of the most common misconceptions surrounding prenuptial agreements.
“If you get a prenup, you are planning for the marriage to fail.”
Drafting a prenup does not mean you expect your marriage to fail. It simply means you are putting your ducks in a row in case life does not unfold as planned.
Think about it this way: Having a Plan B does not mean you have lost faith in Plan A. It simply means you recognize that life can be unpredictable. A prenup allows a couple to address the “what-ifs” while their relationship is strong and they are working together, rather than waiting until emotions are high and decisions become more difficult. It is not planning for the marriage to fail. It is planning responsibly for the future.
“Prenups are only for couples with substantial wealth.”
Prenups are not reserved for celebrities, business owners, or people entering a marriage with a large fortune. Modern relationships and financial lives are more complicated than ever.
Under Texas law, a prenuptial agreement may address:
- Businesses and ownership interests
- Real estate and other property
- Income earned during the marriage
- Retirement accounts and benefits
- Digital assets, including cryptocurrency
- Intellectual property, royalties, and licensing income
- Student loans and other debts
- Expected inheritances
- Property intended for children from previous relationships
- Spousal support in the event of divorce
- Life insurance benefits
- Wills, trusts, and estate-planning arrangements
- Pets and responsibility for their care
Couples may even have frozen embryos to consider. Sarah Lyon states, “Embryos can create an entirely different category of complexity because they involve both financial investment and deeply personal reproductive decisions” (“Does Your Prenup Cover Digital Content—or Even Embryos?,” The New York Times, July 18, 2022). These matters involve unique legal and personal considerations and should be handled with particular care.
A prenup can help a couple establish financial expectations and address how certain assets, debts, and responsibilities will be handled during the marriage, upon divorce, or after one spouse’s death. In other words, prenups are not just for the ultrawealthy. They can benefit couples in many different stages and circumstances of life.
For couples getting married who have children from prior relationships, prenups are especially essential to clarify the assets owned by each spouse. Without that clarity, disputes over ownership can arise between step-siblings, or between step-kids and a surviving spouse.
“Prenups only protect the wealthier spouse.”
This is simply not true. While a prenup can protect wealth brought into a marriage, a thoughtfully prepared agreement should provide clarity and protection for both spouses.
For example, it can protect one spouse from the other’s debts, recognize the contributions of a spouse who steps away from a career to raise children, and establish expectations regarding property and financial support. The goal should not be for one person to “win.” It should be to create an agreement that both spouses understand and consider fair.
As Lyon explains, “Imagine stepping away from a six-figure career for five to 10 years to raise kids. You are not just giving up salary. You’re giving up relationships, promotions, retirement contributions, Social Security credits, and future earning potential.” A prenup can recognize those sacrifices and help protect the spouse who puts a career on hold to care for the family.
Lyon also compares prenuptial planning to insurance: “We all get different types of insurance without expecting anything bad to happen. You get health insurance not wanting to get sick or hoping you get sick. You buy homeowners insurance not crossing your fingers that your house is going to burn down.” Prenuptial planning follows the same basic principle.
No one enters a marriage thinking it will fail. If they did, they probably should not get married in the first place. However, if life takes an unexpected turn and you find yourself meeting with a family law attorney, you may be glad you took the time to plan ahead.
Marvin E. Blum