Yahoo Finance 3 Reasons Self-Made Millionaires Who Didn’t Get a Prenup Might Regret it and 1 Reason Why They Might Not
There are several misconceptions about having a prenuptial agreement, such as the idea that it is not romantic and shows a lack of trust, hence defeating the purpose of marriage. There is also the idea that it is reserved for the super-wealthy.
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Indeed, 50% of adults say they’re open to signing a prenup, according to an Axios-Harris Poll survey, with younger Americans particularly in favor of having one. Yet, just one in five couples has a prenup, according to the survey.
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Protecting Business Assets and Responsibilities
Gene Caballero, a self-made millionaire and co-founder of GreenPal, said that if he gets married, a prenuptial agreement will be necessary, mainly to protect his business interests and responsibilities.
“The primary reason for this is that my two other partners in GreenPal and I agree that, should personal relationships face issues, we do not want spouses becoming unintended business partners,” Caballero said. “A prenup ensures that my personal life changes do not impact the company’s structure or the partnership dynamics, maintaining business stability and protecting all parties involved.”
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Protecting Future Assets
Holly J. Moore, divorce attorney at Moore Family Law Group, said that the point of a prenup is to characterize things that you might acquire in the future.
While many people think that a prenup deals with assets that exist now, Moore said a prenup tells you how to label things such as debts or assets that will be coming or going in the future.
“I had a couple that raised thoroughbred horses, and one of the clauses in their prenuptial agreement specifically dealt with who got the horse’s sperm in the future,” Moore said. “It was important because it was a valuable asset that either party could sell.”
Ensuring Transparency
Brenda Christensen, CEO at Stellar Public Relations said that she knew Elizabeth Taylor’s divorce attorney, who never married, (“He learned from other’s mistakes!”) yet, she realizes that a prenup is important for several reasons.
First, without one, the division of assets can become contentious and complicated during a divorce.
“A prenup clearly outlines how assets will be divided, which can prevent lengthy legal battles and ensure a fair distribution,” Christensen said.
And then, as she noted, a prenup can alleviate some of the stress–divorce can be emotionally challenging–by providing a clear, predetermined agreement. This reduces the emotional and financial turmoil during an already difficult time.
“I recommend considering a prenup not as a plan for failure but as a practical step to protect both parties’ interests,” Christensen said. “It’s a way to ensure that both individuals enter the marriage with transparency and mutual understanding about their financial future.”
No Prenup? Have the Important Money Conversations Prior to a Wedding
Yet, not all self-made millionaires see the value of prenups.
Jeff Rose for instance, a CFP and founder of Good Financial Cents, said he didn’t get one because he believes a marriage is a union between two individuals meant to last forever.
“It felt like getting a prenup meant planning for the marriage to end. Plus, my parents divorced when I was young, and I was determined not to repeat that experience,” Rose said. “I also believed that if our marriage did end, I would make things right for the sake of our relationship and our kids.”
Yet, while Rose said he still does not agree with prenups, he can see why some might consider them, as they can provide clear financial boundaries and reduce potential conflicts.
“My belief is that open and honest communication about finances is crucial. Setting expectations and having these discussions can help ensure both parties feel secure and understood, without necessarily needing a prenup,” Rose said.
In turn, his advice is to have those important financial conversations before getting married.
“Make sure you’re on the same page about money matters, which can prevent a lot of stress and misunderstandings down the road,” Rose said.
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This article originally appeared on GOBankingRates.com: 3 Reasons Self-Made Millionaires Who Didn’t Get a Prenup Might Regret it and 1 Reason Why They Might Not
