Adulting

Jessica Simpson wishes she signed a prenup before marrying Nick Lachey—here's how to know if one is right for you

Nick Lachey and Jessica Simpson at the 2005 ESPY Awards.
Michael Caulfield Archive / Contributor | Getty Images

There's one thing singer-turned-businesswoman Jessica Simpson wishes she had done differently before marrying former 98 Degrees member Nick Lachey in 2002: "I wish I would have signed a prenup!" Simpson, who recently released her memoir "Open Book," said on a recent episode of Dr. Oz.

Simpson married Lachey when she was 22 and he was 31. The couple divorced in 2006 after just over three years of marriage.

"The funny thing is that Nick wanted me to sign a prenup and I was so offended. I was like, But we're going to be together for the rest of our lives!" Simpson said.

Like a lot of newlyweds, Simpson, now 39, believed she and Lachey could beat odds and not end up like the 40% to 50% of people whose marriages end in divorce. "I believe that Nick and I are going to last forever," she told Rolling Stone in 2003.

Simpson, who's now married to former NFL player Eric Johnson, isn't alone in her decision to forgo signing a prenuptial agreement. In fact, only about 5% to 10% of married people sign prenups prior to their big day, according research from Harvard Law School.

While it's becoming more common for young couples to sign prenuptial agreements, it's often still considered a taboo subject that people are hesitant to bring up with their future spouse. There's a real fear that getting a prenup could "jinx" the marriage.

To offer insight on the topic, CNBC Make It spoke to experts about what exactly a prenup is, when it makes sense and how to approach the topic with your partner.

What is a prenuptial agreement?

A prenuptial agreement is a contract that both partners sign prior to entering into a marriage. The agreement states how a couple's joint finances and belongings will be distributed should they ever separate.

"A prenup can help protect valuable assets, such as business enterprise value and prized possessions of both material and sentimental value," says Marguerita Cheng, a certified financial planner and CEO and co-founder of Blue Ocean Global Wealth. "It definitely prompts conversations about attitudes and behavior concerning money among couples."

It's important to note that a prenup does not address anything having to do with kids, so it cannot dictate custody or child support.

How to know if a prenup is right for you

Getting a prenup isn't right for everyone. But there are a few situations when it might make sense.

In general, it's advised that you at least think about signing a prenup if you or your partner have even a few hundred thousand dollars in assets, or if one partner earns far more than the other. If you're both making about the same amount of money annually, a prenup is usually less of a necessity.

A prenup may also make sense if you or your partner has kids from a previous marriage, says Ryan Marshall, a certified financial planner at Ela Financial Group. "Say, you're getting married for the second time, but want to make sure there's something left for any kids you may have from your first marriage," he says.

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Additionally, if you have prized assets to protect, including non-monetary possessions, such as sentimental belongings, or digital assets like social media, signing a prenup is usually a smart move, says Samantha Gorelick, a CFP at Brunch & Budget. "Shared social media accounts, whether a business endeavor or not, are property" and should be thoughtfully divided, she says.

If you've weighed your options and are still on the fence, a simple rule of thumb is to go with your gut. "If you think you may need it, you probably do," says Priya Malani, founder and CEO of Stash Wealth.

You should also keep in mind the cost of getting a prenup. The price you'll end up paying depends on "how complex the situation is, where you live and which attorney you use," Nick Holeman, a certified financial planner at Betterment, told CNBC Make It. "I've seen them be anywhere from $2,000 to $15,000 or more."

How to approach talking about a prenup with your partner

If you think a prenup may be a good option, it's time to have a conversation with your partner.

When approaching the topic, "you need to be up front and tell your partner 'the why' or the reason you feel strongly about this," Marshall says.

This could be for a myriad of reasons, but whatever it is, take the time to thoughtfully explain your reasoning to your partner.

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If you find it difficult to bring up, remember that you and your significant other are simply planning for the worst case scenario, Malani says. "The purpose behind this conversation is to protect both of you in the event of a divorce. Since it can be very difficult to think and act rationally while going through a separation, the best time to solve for how you'd want everything handled is while you're both still very much in love," she says.

Couples can also "ask themselves what's going to help them sleep well at night and ensure that the marriage will be as long and loving as possible," Douglas Boneparth, president and founder of Bone Fide Wealth, suggests. "The biggest, most helpful thing people can do is communicate their thoughts and feelings regarding these things, regardless of how hard it can be."

If your partner resists the idea, first make sure you've explained yourself thoroughly by thoughtfully restating your key concerns. You can also reassure them that you have no plans to leave, you're just trying to stay on the safe side.

If you still can't come to a unified decision, you may want to seek professional help from a financial advisor or divorce attorney who can give an in-depth explanation as to why it would (or would not) be a good idea to create a prenup in your particular case.

Is there ever a time when a prenup is a bad idea?

If you or your partner feel this sort of agreement would benefit one party more than the other, you shouldn't sign anything, Marshall says: "A prenup should protect both parties and not just one person."

If you feel unsure, "seek financial advice from a financial advisor or accountant who specializes in this," he says.

But as long as the agreement seems fair, experts generally agree that there's nothing wrong with creating a prenup just to be on the safe side, even if you plan to stay together for the rest of your lives.

"Even if both individuals come into a marriage with little to no assets, it's still advisable to account for things like inheritance, future business activities and stakeholdership," Malani says. "We almost always advise them to consider the positives of such an agreement set in place."

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