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Prenup: Why You Need It Even If You Don’t Have Money

By 03/22/2021 No Comments

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Prenup is a very touchy subject to bring up with your sweetheart. It is often viewed as taboo and something that could drive the romance away from your relationship.

But as hard as it may be to bring up, it is important that you get a prenup before you really get invested in a relationship. 

In this blog, we’ll discuss the importance of prenups and why women need them more to protect their assets in case of a divorce. 

Normally, we hear prenup discussions being initiated by men, but our guest today argues that women should equally be the ones bringing it up, even if they don’t have any money at the start of the relationship.

Our guest today to help us with all the legal and non-legal aspects of prenups is Naz Barouti, a lawyer, entrepreneur, media commentator, and public speaker. 

So if you’re in a relationship and thinking of getting married soon, then you might wanna read till the end to understand if a prenup is a good idea for you or not.

But first of all, what is a prenup?

What is a Prenup

A prenup or prenuptial agreement is a legally binding document/contract signed by a couple before getting married. It lists all the assets owned by both the individuals and sets forth the rules on how the assets will be divided in case of a separation or divorce.

Prenuptial agreement is essential, especially when the net worth of two individuals has a huge difference. For example, Jeff Bezos’s net worth was $150+ billion before the divorce, while MacKenzie Scott’s net worth was not even 1% of that. Since they didn’t have a prenup, MacKenzie got a huge portion of Bezos’s wealth.

However, it is just a myth that prenup is only for the rich. Almost every couple needs a prenup before marriage to protect their personal assets and avoid any complications if they go for a divorce in the future.

Why is a Prenup Important

If you look at statistics, almost 50% of marriages end up in a divorce. So it would be safe to say that there is a 50% probability that a divorce situation may arise sooner or later in your life.

When you’re talking about finances or dividing money at the time of a divorce, it can get really complicated because your emotions are high. That is why it is important to have these conversations beforehand to avoid making your attorneys rich.

Remember, the biggest winners in a divorce are the attorneys, not the one who’ll take the most from the relationship.

Now, why women need to be aware of prenuptial agreements, and why they need it more than men? Well, Naz says it is because the current trend is that women are getting married later in life. They are working on their careers, and in some cases, they make more than their partners and coming into the relationship with more assets. To protect those assets, more women are now going for a prenup before marriage. 

Moreover, in the United States, there are some community property states, meaning the minute you get married, everything you earn and purchase together is considered community property. That means if you separate, everything gets split 50:50, no matter who owned what before marriage. 

Why Prenup is Important Even if You’re Broke

You might think that a prenup is not for you if you both are broke and have no assets to your name. However, you might be working on a project that you want to protect. For example, a lot of people in tech have an app or an idea they’re working on, which can take off in the middle of the marriage.  

If you want to protect the work you’ve done on that idea or project up until that point, you wanna make sure that if the marriage doesn’t work out, you can walk away with whatever you have dedicated your life to, which is only possible if you have a prenup. 

Even if you don’t have anything of yourself, you might want to protect the inherited assets that your families have worked hard for, which you want to keep within the family.

So it’s not that you need to be very wealthy in order to do a prenuptial agreement. Almost every couple needs it today.

Having problems understanding the analysis, or does the language seem foreign to you? Make sure you attend the free masterclass here 👇

What a Prenup Prevents

One of the biggest things that a prenuptial agreement can prevent is the concept of alimony and spousal support. Many people want to clear this before entering into a marriage.

It is especially important for women because they tend to be the caretakers of everyone in their lives. In case if a scenario comes up where the marriage doesn’t work out, and you have to put your career on the back burner to take care of the kids, you want to negotiate it in the prenup regarding who will provide the financial support.

A prenup is not only about deciding what’s yours and what’s mine but a tool where you can negotiate. This is a misconception that a prenup is only to divide the assets between the husband and the wife in case of separation. The only thing that a prenuptial agreement can’t discuss is child support.

This might sound a little pessimistic, but it’s important that before entering a relationship, whether business or romantic, you need to have an exit strategy in hand.

There are many clauses in a prenuptial agreement, like protecting the growth of an asset in case one of the partners has an asset before marriage that can grow exponentially in the future. Basically, there are enough clauses that you can prevent any catastrophic situation that may arise in your relationship. Or at the end of your relationship.

Also Read: How to Talk About Money With Your Family

How to Bring Up a Prenup Conversation

According to Naz, you ideally shouldn’t wait until you’re engaged to have these conversations. The topic of signing a prenup should come along with important topics like having kids and deciding where you’ll live after marriage.

You need to normalize having these conversations about money with your partner. Money may not buy you happiness, but it does buy a lot of stuff that can help eliminate stress in your relationship. So it is needed to be discussed in any relationship.

Your parents and family might see prenup again as taboo, but you have to develop with the changes in society. Life was very different for your parents when they got married, and it’s completely different for you now.

To start the prenup conversation, the couple needs to communicate with each other what their goal is. Because what happens is you have to have two separate attorneys for both of you.

One attorney drafts and represents one fiance, and then the other attorney is gonna review the work of the first attorney and explain it to the other fiance. 

But what ends up happening in many cases is that the other attorney presents the information to their client in a very non-sensitive way causing one fiance to be furious.

So it’s crucial for the couple to go to the drawing board and discuss everything from spousal support to before-marriage assets to splitting the assets in case of a divorce. If you guys have a solid plan, then the lawyers can turn it into legal words. There is no point in hiring attorneys to make a plan for you.

The Legal Bible For Women

Financial abuse is a huge thing. When we talk about abuse in a relationship, we mostly think about physical or mental but financial abuse is something that keeps a lot of men and women in relationships that they’re not happy in. 

That is why Naz decided to write a book for women that she calls the legal bible for women on how to protect themselves during different stages of life. It is based on cases that she has witnessed during her 10-year career as an attorney. 
The book aims to ease the process of dealing with attorneys and helps understand the complex legal concepts easily so that you can apply them in your life. It is available online on Amazon.

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