Prenuptial agreements, commonly referred to as “prenups,” are common among the rich and famous.
But prenups aren’t just for celebrities. Normal people need them, too — even when they’re broke. If you’re considering getting married, a prenuptial agreement is a smart move for both you and your spouse.
What is a prenup?
What is a prenup, exactly? A prenuptial agreement is a contract mutually agreed upon by the two people getting married.
It addresses issues like money or property brought into the marriage, but it also lays out what happens to the assets in the case of divorce. A prenup can protect inherited valuables and defines a predetermined settlement if the marriage goes sour.
While it may not sound romantic, a prenuptial agreement is necessary to provide protection. Even when you’re young, have debt, and no property, a prenup is still a good idea.
Why a prenup is beneficial
After asking, “What is a prenup,” many couples often follow up with, “Is it really necessary?” Attorney Jeffrey J. Kash has been practicing family law for 28 years and is an advocate of prenups for most couples.
“Even if the couple does not have assets to protect, they should plan for addressing income disparity and how it would be addressed,” says Kash.
“If one spouse will work while the other pursues post-graduate work, their incomes would be quite different for a time. Should the employed spouse pay alimony or spousal support in the event of a divorce or separation?”
Additionally, a prenup can also protect your accounts. While you may not think you have much in assets, many people have more than they think. From pensions to employer-offered retirement accounts, the money you have set aside is at risk if there is a divorce.
But one of the biggest things prenups do is establish how you will treat debt. If one person enters the relationship with significant student loan debt, a prenup can outline how the couple manages the debt and how you will divide it in the case of a split.
Finally, if one or both of you has children, a prenup adds protection for them. “If there are children from previous relationships, a prenup can help protect those children by excluding certain assets from being subject to division in divorce,” says Kash.
How to get a prenup
To create a prenup, you need to hire an attorney. It’s an added expense, but a necessary one. You each should have your own lawyer to avoid any conflict of interest. Many lawyers will agree to do a basic prenuptial agreement for a flat fee.
Talk with your partner about your finances, debts, assets, and anything you expect to inherit. It’s essential that you each approach the conversation openly and honestly. Discuss what your priorities are and what things are important for you to protect.
In your prenup, you will have to list all of your assets and describe them, down to the cut of your diamond ring and the artist who painted that picture your aunt gave you.
You also have to list all of your debts and how you will handle them. If your partner is solely responsible for his student loans, include that. If you will help him pay down the debt, write that down instead.
Finally, you can lay out any important situations that would affect your separation. If you want to include a special clause for infidelity or the sale of property, outline that as well.
Your lawyers will help walk you through the process and discuss other issues to include in the prenup, including alimony, spousal support, and what happens to your home.
“Keep in mind that each state has its own laws regarding marital property and the division of property, alimony, support, and prenups,” warns Kash. “Anyone considering getting married should consider a prenup and consult a good family lawyer in his or her state.”
Should I get a prenup?
If you can’t decide if you need a prenup, take the time to list out all of your accounts and valuables. You may be surprised at how much you really do have, and how much would be at risk. Getting a prenup provides much-needed protection.
Sitting down and developing your prenup may not be the best date you’ve ever had with your partner, but by having these conversations before you get married you can pave the way for a smoother future. Laying out your expectations can take away a lot of the pressure you would face otherwise in your marriage.
If you’re considering getting married, talk to your partner and set up a time to go over your financial situations. Then meet with your attorneys to create and finalize your prenuptial agreement.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|