Advice for Marriage & Prenuptial Agreements

A "Dear Tyler" article

Recently, a friend reached out about possibly getting married and wanted some advice and information. Here is his question:

I’ve been in a serious relationship for about six months now. I wouldn’t say marriage is around the corner, but it’s definitely something we’re both thinking about. We’ve had lots of the hard discussions up front, we’re planning to do pre-marriage counseling and a prenup when the time comes. Any general suggestions you could give me? Things to watch out for, things to put in a prenup, why most people get divorced, really anything you’d have to say?

Counseling

Pre-marriage counseling is a great idea. Anything you can do for a better chance at a successful marriage is definitely worth your time.

Should I get a Prenuptial Agreement?

I have no real opinion on whether YOU should get a prenuptial agreement or not. But my take on why couples get divorced might kind of play into whether its in your best interest or not to get one. Couples don’t get married anticipating divorce and therefore we often do things against our own interest. Making sacrifices for your spouse or adding them to title won’t be good if you get divorced, but it could help stabilize a marriage and keep you from getting divorced at all.

Key to Avoiding Divorce

The real key to a lasting marriage is communication and openness. Each state likely has statutes and requirements for a prenuptial agreement to be enforced. In CA, one of the requirements that must be completed or for getting a divorce (in CA), each party must disclose all their finances to the other party. Some couples are very interconnected and share everything, but most that I see with a divorce have separate accounts. I think the separation of accounts or at least the non-access to all accounts is a bad starting point. If something is going wrong in your relationship/marriage (and it will) the ability to hide activities is a ripe playground for feeling the freedom to search for attention elsewhere. For me personally, we don’t share emails or X accounts, but phone access is always there for each of us to explore. I truly have no issue with my wife checking out my X DM’s or group-chats. I post and communicate as if my spouse is going to read it regardless. Over the years she’s wondered about these group-chats and checked it out (to her dismay and disappointment). Point is, this open access keeps her trusting me and it keeps me honest. Same goes for her stuff.

What to Get from a Prenup

With the keys to not getting a divorce in mind, a prenup is really about rearranging the community property laws to how you both want them to be. This is just a contract between two parties in anticipation of litigation (divorce). [All my examples will be from a CA perspective, but the concepts will apply for you as well]

For example, community property is defined as all assets and debts acquired from the date of marriage through the date of separation (this is the date you stop living as a married couple, not when you file for divorce). Anything you acquire before marriage or after separation or by gift, divine or inheritance (even during marriage) is separate property. Therefore, during marriage your paycheck is community property and so anything you buy or debt you pay down with your income is considered community property. In addition, if you have separate property and use your paycheck to enhance it (like adding a pool to a house bought before marriage), or pay down a debt (like the mortgage) or add your paycheck to a savings account of inheritance money, it now has community aspects to it and could be considered community property. Comingling separate and community assets (like money) can result in changing the characterization of the asset from separate to community property. Meaning, you will have to equally divide it upon dissolution.

Now, with a prenup you can designate specific property to be considered separate property. Therefore, you can say retirement, a house or cars etc., are separate property and are not subject to division as community property if you get divorced. Additionally, you can define that each paycheck is considered separate property. I typically suggest that the parties have a joint account that is for community debts, and any money added to that account is community and anything purchased from that account is community. This way you would have your paycheck go into a separate account and if you both want to buy something you can do it from the joint account by adding to it making the money community by how you defined it in the agreement. You can be as simple or complicated as you wish.

Not Everything Can Be Enforced

The only thing you really can’t agree on for a prenup is for something that is against public policy. This would be something like agreeing one of you would never have to pay child support. You CAN agree that no spousal support will ever be owed, but you can’t agree that it would never be owed even if a party were to become incapacitated. This may vary by state and you might not know what is against public policy until you try to enforce the agreement.

From my personal and business experience, nothing helps a marriage more than working together as a team. Often the division of finances where transparancy isn’t top priority doesn’t enhance the “team” feeling and can start divisions in the relationship. If you are both set on a prenup, then do what you can to make sure you keep everything transparent and be fully open or it will eventually be a problem or a reason to feel like there is a problem.

Best of luck.