I’m a broke millennial. Do I need a prenup?

Spend/Save/Invest

Nov 9

We all know the typical cliché where a prenup is discussed: the gorgeous but broke woman marries the rich man, and he wants to make sure she doesn’t “run off with his money” if they get a divorce. Let’s face it, most of us aren’t rich and aren’t marrying for money. But that doesn’t mean a prenup isn’t for us. In fact, prenups aren’t just for people concerned with protecting their wealth.

A prenup, or prenuptial agreement, is simply a contractual agreement for two people entering a marriage. This contract is an opportunity for the couple to detail what happens with their finances and assets during their marriage and in the case of divorce. Something important to understand about prenups is that they are essentially setting rules for the legal aspects of a marriage. The absence of a prenup doesn’t mean there aren’t legal agreements in your marriage and in the case of its dissolution. It just means you aren’t setting them.

The absence of a prenup doesn’t mean there aren’t legal agreements in your marriage and in the case of its dissolution. It just means you aren’t setting them.

Without a prenup, the laws of the state you file for divorce in will decide what laws apply to the financial relationship of your marriage. For couples planning on moving to different states throughout their marriage, a prenup will set the rules for the finances of your marriage rather than the state you’re in.

Prenups are often discussed in terms of divorce, but they protect so much more than that. Prenups cover your assets and liabilities as a couple. Prenups allow couples to set roles and expectations for how assets and liabilities will be managed as a couple. For example, most people nowadays (especially millennials and Gen Z) have debt — big debt and little debt, which fall under the liability category. Whether it’s student loans, credit cards or car payments, a prenup can help you set up expectations for how you’ll manage your debt as a couple.

When it comes down to it, prenups allow an opportunity for couples entering a contractual agreement (marriage) to talk candidly about their finances. It provides an opportunity to put all the cards on the table and create a plan together about what you want your financial future to look like together.