Prenups – a warning sign or a smart financial decision?

prenuptial agreements can be the source of serious controversy for couples who are planning to get married. Some see the agreements as a necessary first step in a life of prudent financial planning, while others view prenups as an anti-romantic plan for divorce.

The truth is that in most cases a prenup is somewhere in between. Perhaps one spouse’s family has insisted on a prenup to protect a business interest or property, or maybe a prenup was suggested to the couple as a way to work through some important decisions before the big day.

In some cases, a prenup may not be a mutual decision but could be signed as a result of pressure from one soon-to-be-spouse or their family. In these situations it is important to look at the document carefully and to discuss the purposes and sentiment behind it before signing.

After all, a marriage from a legal perspective is a series of contractual commitments with recognition of a special type of privity between two people by the state. A marriage creates a new entity – the family – and the terms of the contract will have a big impact on how that entity operates going forward.

Prenuptial agreements do often deal with what would happen in the event of a divorce, but that can also say a lot about what will happen during the course of a marriage.

What has your experience been – was a prenup a sign of prudent financial planning? Or a signal that things would not be harmonious down the road?

Source: Huffington Post, “Sign This, Or Else! How Prenup Powerplays Prevail,” Susan Pease Gadoua, May 22, 2013.