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A responsible conversation: The prenuptial agreement

Upon marriage, no couple believes their romance will end in divorce. Beginning the conversation of signing prenuptial agreements may prove uncomfortable, but the document itself saves many couples from lost assets and confusion in the event of a divorce.

Negative connotations surround signing a prenuptial agreement because some believe it implies a divorce inclination before marriage. Yet a prenuptial agreement may suggest independence and responsibility over individual assets. As long as couples discuss the arrangement as a positive element of marriage preparation, their lives begin on the same financial page.

Who signs a prenup?

The CDC reported that in the United States, for every 1,000 people, the marriage rate was 6.9 and the divorce rate was 3.2 in 2016. For every two couples that marry, one couple divorces.

Drafting a prenuptial agreement protects you and your future spouse in the event you exemplify the divorce statistic.

Couples that may wish to sign a prenuptial agreement may include:

  • Individually wealthy couples: Many couples that agree to sign prenuptial agreements hold individual wealth. Perhaps they have found serious career success or won the lottery. A prenup protects each person's previous accomplishments.
  • Couples entering second and third marriages: Divorce rates for second and third marriages are 50 percent and 67 percent, respectively. The odds fall against your marriage so you may wish to defend your assets from a more likely divorce.
  • Couples over 40: Older marrying couples may have acquired large salaries, made significant moves in career or obtained expensive assets while single. You may even have children. It may prove wise for these couples to sign a prenup, so that wealth remains with the respective individual and his or her children.
  • Individuals with family businesses: Traditionally, this reason describes the most common prenuptial agreement situation. Family business often gift large sums to successors or even promise leading job positions in the company. Signing a prenup, should your last name imply the possible promise of wealth to a dishonest fiancĂ©, may benefit your future.

The most significant benefit: Understanding financial expectations

A study conducted by Kansas State University found that financial disagreements showed the strongest correlation between couples and divorce. If your prenuptial agreement distinctly differentiated your assets and your spouse's assets, you may avoid financial disputes altogether.

Signing a prenup allows you to:

  • determine your assets
  • disclose your income
  • plan for the future

Couples sign prenuptial agreements for various reasons, but the protection of assets proves the most significant benefit to the arrangement. Shielding your wealth in a failed marriage may prove to be a responsible decision to prevent financial disaster.

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