Using Prenups for Financial Protection: Handling Prior Wealth

A growing number of people are adopting the advice to take on prenuptial agreements before getting married. One recent study found that as many as 15% of Americans have signed a prenuptial agreement, that’s an increase of 12% since 2010, and it’s extremely popular with younger generations. For those between the ages of 18 and 34, 40% of them have signed a prenup before getting married.

Many of these millennials have watched their parents go through expensive and very stressful divorces. This is a leading reason why many of them have chosen to sign prenuptial agreements in advance to make for smoother transitions in the event of a divorce. Another major reason to consider a prenuptial agreement is due to drastic financial differences between you and your partner heading into the marriage.

If you’re inheriting substantial wealth or own a business, you may want to protect these assets. Knowing what counts as marital property versus personal property is helpful before getting married so you can ensure you and your spouse are on the same page. These financial conversations may be difficult, but are certainly worth having.