In the afterglow of getting engaged and preparing to marry, my partner and I discussed a prenuptial agreement. I was 28 when we got engaged, working full time as an engineer and fully debt-free. My partner, B, was 30, also working full time but with over $30,000 in student loan debt.
We were very excited to take the next step in our relationship, but we knew we would not be on the same financial footing starting our marriage. I was debt-free and hungry to invest, while B was aggressively working to pay off their student loans. I knew we needed to discuss these differences before we got married.
We also recognized our love for each other might change in the future. This is a reality, a fact. Weddings are common. Divorce is also incredibly common. All of these changes are a part of life. As we started out in our partnership, we made a point to discuss both aspects: a life together and a life apart.
Talking about our financial fears
Entering into a marriage, or a committed partnership, requires defining and protecting your assets. As awkward as it was to get the conversation started, we both knew it was necessary to discuss our concerns as we planned for a life together.
Personally, I felt that making a plan to protect my assets if we split up gave me insight into my financial fears around divorce. Discussing these concerns allowed greater transparency between me and B. In these conversations, I realized the fears I had around transitioning from an independent woman in charge of her own finances to a married woman who would share finances with her partner.
Some questions that came up during our conversations included: How did we plan to divide up our estate if we separated? What was fair? What claims do we have to any inheritances? Did my partner think they were entitled to my retirement savings that I accumulated prior to our marriage? Was I going to be responsible for helping to pay off their student loan debt?
These questions became the focal points of our conversations as we discussed what getting married would mean for our money. Every aspect of our money was considered. It was important for us to be on the same page with our financial expectations prior to our wedding.
These conversations were not easy. Talking about divorce or a prenup can become a downer — why would you want to discuss breaking up when you aren't even married yet? There is a misconception that a prenup connotes a lack of trust or a feeling like the marriage is doomed before it even starts. But it doesn't have to be that way. For me and my partner, talking about divorce allowed us to voice our financial concerns and make clear what a fair split should look like.
I try to think of a divorce plan like insurance — I'm always glad I have it but also happy to never use it.
Doing our research
Following our conversations, we researched what was involved in getting a divorce in the state where we live. I recommend all couples do this, as we were surprised to learn each state has different standards.
We learned that divorce costs vary per state, some states require a period of separation before any divorce can be granted, and depending on when the bank account was created and who is listed as owner, bank accounts can be considered either community property or separate property.
Once we did our research, we had to determine if we wanted to leave our asset separation up to a court and what fees we could expect to pay if we were to divorce with and without a prenup.
We talked about the prenup and a plan for divorce for over six months. These conversations had started earlier, during the dating phase of our relationship, but once we got engaged, we started discussing our views in earnest.
Making a plan for our future
The conversations were awkward, I won't lie. I was not always rational or controlled. While I appreciated learning about B's fears, I was truly concerned about my finances. I had spent five years paying off my student loan debt, and I had worked very hard for my positive net worth. I questioned how I could best protect my financial assets from my fiancé in the event of a divorce.
At the conclusion of all of this research and after many conversations, we decided against a prenup. Our main reason was that our individual assets were similar in value at the time of marriage (even with B's student loans). Instead, we drafted a "in the event of divorce" document detailing how we wanted our assets to be divided based on our concerns.
We also included in that document how B's student loans would be factored into our divorce depending on the number of years we were married. Since B entered our marriage with loan debt, we decided to pay the debt off together. And if we divorced, we agreed that B would pay me back the student loan amount.
We also decided that if we divorced, our retirement account balance (and accumulated interest from that balance) prior to marriage would not be considered a shared asset.
Marriages begin and marriages end. It was important for me and my partner to be protected and prepared for our ending, as uncomfortable and unromantic as that may seem. Even as we decided against a legally binding prenup, the conversations we had created clarity, as we were able to understand each other's financial concerns and form an understanding of how we would move forward if divorced.
We love each other, so what better way to show that love than being clear and intentional with our future?
