I’m Getting Married Soon: Should I Get a Prenup to Protect My $1 Million Assets?

A Reddit user is getting married soon and is wondering if he should get a prenup to protect the assets he is going into the marriage with.

He explained that both he and his fiancée are in their early 30s. His liquid net worth is around $1 million, and he earns around $180K a year. His fiancée has $50,000 in student debt and car loans and around $10,000 saved. She was making $100K per year but lost her job and is looking for a new one that will pay more.

He’s uncertain about how they should manage their finances after they get married, but is leaning towards only wanting to protect the money he’s bringing in and dividing everything as a partnership after they tie the knot. So, would a prenup be a good way to do that, or is there another approach that he should take?

A prenup can be a good way to protect assets going into a marriage

Prenuptial agreements may be controversial, but the reality is that they can be a good way to protect yourself if you go into a marriage with a disparity in assets and income. 

While the $1 million the poster is bringing into the marriage would be considered separate property, it would stay separate property only if the poster did not co-mingle it with marital assets once the couple was legally wed. The specific way marital assets would be divided would vary by state, but the bottom line is the poster would have to be careful to keep this money separate if he didn’t have a prenup and wanted to ensure he could leave with all of it.

Creating a prenuptial agreement eliminates this issue. It would also give the couple a chance to talk about financial matters that could come up later, like whether alimony would be paid if the earning gap persists between the couple or if either spouse decides to stay home with the children once they are born. 

The key would be for both parties to have a lawyer representing them as the prenup is created, though, and to ensure they come up with a premarital contract that makes them both happy and that doesn’t create lasting resentment or conflict between the two.

How to combine assets after getting married  

Premarital agreements make good sense because they provide protection when someone has a lot of assets, and because they can allow you to ensure that divorce happens as quickly and cost-effectively as possible.

However, the poster is also uncertain about how to handle shared marital assets after they have tied the knot. At that point, unless the prenup specifies otherwise, money that each person brings in would typically be considered part of the marital property that should be divided 50/50 in a community property state or equitably (fairly) in an equitable distribution state. 

For many couples, sharing their financial life when they are married makes sense as they can work toward joint financial goals together. This is the approach the Redditor seems to be leaning towards, and it is the approach recommended by financial experts like Dave Ramsey. 

The couple will want to talk together, though, and make sure they are on the same page about things like shared spending and savings goals. Since money can be a major source of conflict in a relationship, ensuring they have the same financial values before marriage is a good investment in the relationship that can help set them up for success.

Talking together with a financial advisor could also be helpful, as an advisor can help them to better define shared goals and create a path towards combining their finance that makes good sense for building a life together. 

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