The Prenup: In Case Love Doesn’t Conquer All

The idea of a prenuptial agreement is distasteful for many couples, for understandable reasons: The last thing you want to think about when you’re in love is the possibility that it won’t last forever.

But prenups make a lot of sense, if only to open up important discussions about your mutual financial picture. You don’t want to be arguing about money after you’re married. A big benefit of a prenup is the precedent it sets for honest, frank communication. Better to clear the air now than try to do so later on after conflict arises. And it’s better to work through complicated financial questions when feelings are still warm and fuzzy, instead of later on when life’s responsibilities and worries have built up over the years.

Still not sure if you want or need a prenup? Here’s a checklist to help you decide. If more than a couple of these points apply to you, a prenup might be to your benefit:

  • You own part or all of a business, particularly a startup, or you have stock options in a startup that might greatly increase in value in the future.
  • You plan to buy a home together, or one of you already owns a home (particularly in a highly appreciating real estate market).
  • Either of you is expecting a gap in income due to such things as returning to school or staying at home to raise children. A prenup can make sure you both share the financial responsibility and opportunity costs of raising kids. It can also make sure that the needs of the partner who helped put the other through school to obtain a higher-paying job are addressed in the event of a divorce.
  • You want to keep some assets separate, such as your parents’ old home or a vacation home.
  • You have other beneficiaries you want to keep in mind, such as aging relatives, nieces and nephews, or children from another marriage.
  • You have a large inheritance coming down the road. Inheritances are generally considered separate property. But if community property income is commingled with inherited assets (in an investment account, for example) or used to maintain them (as in the case of real estate), the audit trail can get murky.
  • You have a big difference in the amount of assets (or debt) each of you is bringing into the marriage. Generally, what each person brings into the marriage remains his or hers. But wrinkles abound. For example, what happens if one partner uses community property income to pay off pre-marriage student debt, leaving the other partner to shoulder a bigger share of household expenses?
  • You worry about your partner’s debt or spending habits. If your partner has lots of debt and you get divorced, you probably don’t want to find yourself saddled with half of that debt. Unpaid taxes and liens are especially dangerous.
  • You want to address spousal support upfront, so that it’s already dealt with in the event of a divorce. This could reduce conflict later on that has to be litigated, and which could end up being more costly than what you would have spent on the prenuptial agreement in the first place.

Keep in mind you can’t make any provisions for child custody, visitation or support in a prenuptial agreement. These will be addressed at the time of a divorce or separation. Also, many attorneys won’t do a prenup if there is less than six months until the wedding, so get the ball rolling early. It’s best if you both have separate counsel. Full disclosure is necessary or the prenup may be voided down the road.

It’s always a good idea to begin your relationship with a firm grasp of what constitutes good financial habits. And it’s a great idea to maintain those habits!


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future  performance of any specific investment, investment strategy, or product (including  the  investments  and/or  investment  strategies  recommended  or  undertaken by Private Ocean,  LLC [“Private  Ocean”]),  or any  non-investment  related  content,  made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated  historical  performance  level(s),  be  suitable  for  your  portfolio  or  individual situation,  or  prove  successful.  Due  to various  factors,  including  changing  market conditions  and/or  applicable  laws,  the  content  may  no  longer  be  reflective  of  current opinions  or  positions.   Moreover,  you  should  not  assume  that  any  discussion  or information  contained  in  this  blog  serves  as  the  receipt  of,  or  as  a  substitute  for, personalized investment advice from Private Ocean.  Please remember that if you are a Private Ocean client, it remains your responsibility to advise Private Ocean, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/ evaluating/ revising our previous recommendations and/or services, or  if  you  would  like  to  impose,  add,  or  to  modify  any  reasonable  restrictions  to  our investment advisory services. To the extent that a reader has any questions regarding the applicability of any  specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Private Ocean is  neither  a  law  firm  nor  a  certified  public  accounting  firm  and  no  portion  of  the  blog content should be construed as legal or accounting advice. A copy of the Private Ocean’s current written disclosure Brochure discussing our advisory services and fees is available for  review  upon  requestor  at Please note: Private  Ocean does not  make  any representations  or  warranties  as  to  the  accuracy,  timeliness,  suitability, completeness,  or  relevance  of  any  information  prepared  by  any  unaffiliated  third  party, whether  linked  to Private  Ocean’s web  site  or blog  or  incorporated  herein,  and  takes  no responsibility  for any  such  content. All  such  information  is provided  solely  for convenience  purposes  only  and  all  users  thereof  should  be  guided  accordingly. Please also note: If  you  are  a Private  Ocean client, please  advise  us if  you  have  not  been receiving account statements (at least quarterly) from the account custodian.