Confession: I Almost Didn’t Get a Prenup

We “needed” to get a prenup.

I knew this much from the finance-laden world I swim in. I can recite the reasons why:

“Think of it like marriage insurance. Just like you hope you never get in a car accident, but you always have insurance anyway.“

“You already have a prenup. It’s just written by the government, and I don’t trust them as far as I can throw them.“

“It is one of the first ways you and your future spouse can get on the same page with money… while things are still peachy.“

Yet despite all the advice saying it’s a good idea, and knowing that I wanted a prenup, I didn’t know where to start.

This is a two part series. In Part 1, I want to share my process of deciding whether or not to do a prenup. When push came to shove, I almost gave up on it. In Part 2, I’ll share the step-by-step of our process of actually obtaining a prenup and the decisions we made along the way.

Please Note! I am not a lawyer. This is not intended to constitute legal or financial advice and does not take your individual circumstances and financial situation into account and is for informational purposes only. The content is also U.S. focused, and even more narrowly, California specific.

Why You Should Get A Prenup

I am skipping over writing a generic “why you should get a prenup” article. They have been written. Here are a couple, in case you’re in need of a refresher:

Her First 100k: Controversial Money Opinion: Everyone needs a prenup

Hello Prenup: 20 Reasons Why People Get Prenups

NPR: Getting hitched? Protect your finances with a prenup

My assumption is you already know, like I did, that you “should” get a prenup. Then I want to share why I almost didn’t get one, what convinced me to make the effort, and finally the service I used to get it done.

Addressing Prenup Biases

We did hear from some people, “But why do you even need a prenup, it’s not like you have a lot of money.” Which is kind of hilarious, both because of the assumption and also because a prenup can cover a huge host of things, not just premarital assets. You can make decisions about businesses, intellectual property, and even who gets the dog.

Before doing any research, I wasn’t exactly sure what the “default” was. As I watched Love Is Blind and saw couples who had made it to the altar now at a reunion one year later glowering at each other, I found myself double checking whether pre-marital assets stay separate (yes, in most cases and countries).

People who say you probably shouldn’t get a prenup usually are addressing the power imbalances that come from the “stereotypical” prenup. You know the one: the wealthier spouse wants to make sure the less-wealthy gets nada. This is typically why it’s required that both parties have representation, so each person understands their rights. I agree that you should not sign a prenup that you are not comfortable with, so it’s important to understand what the implications are (with professional guidance).

Step One: Convincing My Partner To Say Yes To A Prenup

To be honest, I had it easy when it came to getting on the same page with my partner. They were on board with a prenup from the beginning. They agreed that it’s best to get on the same page before entering into a legally binding contract of marriage. Besides me being staunchly pro-prenup for years, they also began dipping their toe into finance content, listening to couples argue about money on Ramit’s podcast Money With Couples and tuning into Money With Katie during their commute into work.

Deep Diving Together

Together, we listened to a few Money With Katie episodes that did a deep dive on marriage, prenups, and what to consider. In How Marriage Legally Changes Your Financial Rights, the episode covered how your partner’s debt can affect you in marriage, even if you had no idea it existed.

Let’s say you and your spouse have totally separate finances, right? You guys are not in each other’s financial business at all and they rack up $20,000 in credit card debt. Creditors can come after jointly held property to get their money. […] And this is why in community property states, if you don’t have a prenup, you need to have your financial ducks in the straightest line possible because your personal financial liability is from where I’m sitting, pretty tremendous. In equitable distribution states, the court can decide what’s an equitable way to split the liability.

Flash forward to me Googling “is California a community property or equitable distribution state”. Time to get our financial ducks in a row.

Step Two: Researching Local Laws

On a fine Tuesday, I walked to our local coffee shop and sat down to read California divorce laws. Because something in Katie’s episode rang true:

I loved how divorce attorney James Sexton framed it in a Financial Diet video. He said, marriage is the most legally significant thing you can do to your personhood other than die, and you don’t get so much as a leaflet that explains what you just agreed to. So here’s your leaflet.

Of course she goes into some of the legalities in the episode, but isn’t the leaflet right there, in the laws? Which it turns out we can Google before signing a contract that isn’t even presented to you so you know what you’re agreeing to (which is freaking insane?!?!??! if you think about it).

What is the ‘default’ prenup for you?

So here I am on a cool autumn day, reading about Rights and Obligations During Marriage, Conciliation Proceedings, Division of Property, Transmutation of Property, Characterization of Marital Property, Liability of Marital Property….Essentially… California’s “default” prenup. (It’s a community property state, by the way.)

2550. Except upon the written agreement of the parties, or on oral stipulation of the parties in open court, or as otherwise provided in this division, in a proceeding for dissolution of marriage or for legal separation of the parties, the court shall, either in its judgment of dissolution of the marriage, in its judgment of legal separation of the parties, or at a later time if it expressly reserves jurisdiction to make such a property division, divide the community estate of the parties equally.

Read more: Califonia Legislative Information i.e. the laws

All the laws I read seemed to cover most scenarios. I wasn’t sure exactly what I’d change. It seemed like prenups in some cases are there to waive rights (spousal support, for example) that the law gives you by default. I’d like to keep my rights, thank you very much! This is when I started to doubt if we really needed a prenup.

Step Three: A Wobble. Getting A Prenup Is Harder Than I Expected

One thing made clear in my research on prenups: one of the biggest benefits is that it helps the couple decide what is separate property and what is community property. For some experts, the essential reason to get a prenup is to be on the same page financially as your partner.

“The first thing is actually to know what each other’s finances look like going into marriage. I will tell you, Katie, and you know this too, a lot of people don’t know. They don’t know and they find out when they get married that they married someone who might have significant credit card debt or significant student loans, and there isn’t anything wrong with that, but you should know that, right? Because part of being a marriage is an economic union.” – How Marriage Legally Changes Your Financial Rights

A prenup requires full disclosure of all assets and liabilities from each partner. This is great for some folks who may not talk much about money in their relationship. Marriage is a financial tether as much as a romantic one, so it’s critical you know exactly what you’re signing up for. However, in my situation, “getting on the same page” was not a motivating factor. We already have a clear picture into each other’s financial world. We already have money dates. We talk about money all the time. I do not want to spend thousands of dollars just to ensure my partner has disclosed all of their assets.

A Prenup Sounds Good And All But How Much Will It Cost Me

Then I started looking into the cost of actually getting a prenup, and I started to wobble. Each of us would need representation for a prenup to be considered valid. Even if we were in a state where that was not required, it’s still prudent that each person gets legal representation. If you don’t, and you divorce in a state where it is required, or your prenup is declared to be signed under duress, or it’s considered unbalanced, your prenup could be thrown out.

As I started to look into lawyer fees, I started to deflate. To draft a prenup looked like it could cost a flat fee from $800-$1000, and then we would each need a lawyer. Lawyer fees varied widely from around $250-$700 an hour in my area. And who knows how many hours they will need? How much am I willing to pay to essentially say, “actually California law looks good to me, let’s go with that.” It looked like we would be paying around $3000 to $6000 even for a simple, boilerplate prenup.

So we had to ask ourselves, do we really need a prenup?

Who Else Has A Prenup? Anyone?

I started looking around to my peers. Many of my financial friends have gotten married, and surprisingly, very few have a prenup. Most financial creators who advocate for prenups say they didn’t get one, but would get one if they could do it over.

There were only two people I knew who had gotten a prenup: Vivian Tu (YourRichBFF) and Ramit Sethi.

Vivan Tu outlined her prenup in a TikTok video. “For our prenup, we went 50-50 on everything that we brought to the marriage, 50-50 on everything we’d earned during the marriage, and the only exception was a 100% carve out of the equity in my business,” Tu said.

Ramit tweeted about his experience, “We created a prenup that we BOTH feel good about. The prenup process taught me more about how we both think about money than anything I’d ever done […] Looking back, I really should have started this process six months before I proposed so we could have talked about money more regularly.”

Both Tu and Ramit have businesses on the line when it comes to their marriage. Even Ramit says in his interview on Prenups with Tim Ferriss:

“Most people don’t need a prenup because most people are coming into a marriage with relatively similar assets. The places where it starts to make sense, is if you have some major amount of assets, whether it be a house, whether it be an inheritance, a business, those kinds of things.” Then Ferris adds, “Intellectual property.”

So here I am, looking at these two examples, and thinking maybe a prenup doesn’t apply to me. These two finance folks had substantial businesses set up when they entered their marriage. I have Financial Mechanic, which as a business makes approximately -$16 per month (yes, in the negative over here). It is more of a hobby than a business endeavor. Neither of us own a home.

We like the California default of “pre-marital property is separate, post-marital property is community.” So as long as we took the time to really have money conversations, could we save multiple thousands on lawyers and just go with California law if we were to ever divorce?

The answer is a big NO.

What Do You Mean The Contract Can Change??

Because without a prenup, if we were to move to another state, new laws would apply. And even the laws in the state where we currently live can change. All of my Tuesday law-reading would be for naught. Because In the United States, divorce laws are governed by the state where you reside at the time of the divorce, not the state where you were married.

This adds an extra layer of uncertainty. Even if I thought I knew what I was signing up for when I signed a marriage contract, it could all change. With a prenup, you can specify which state laws which should apply during a divorce. This is one of the elements that knocked me firmly back in the ‘we should get a prenup’ camp. The last thing I would want in a splitting-up scenario is more uncertainty. At least with a prenup, we could know what to expect. I could thank my former self for putting in the time, money, and effort to put everything down on paper.

Part Two Up Next

This story is about the rollercoaster we went on while deciding whether or not a prenup was for us. We ultimately decided to make the effort and used a service called Hello Prenup to make it easier (and cheaper).

I found it difficult to find resources from people who have actually had prenups (aside from Tu and Sethi, who I applaud for sharing their experiences!). I will share the step-by-step process we took to go from:

“We should probably get a prenup but it seems hard and expensive and maybe we don’t even need one anyway,” to “Phew, I’m glad we did that, everyone should!”

I’ll share excerpts from our prenup, two sticking points that we spent a lot of time discussing, and tell how our lawyers helped us understand the prenup better.

The important thing is that it made us feel more confident in our decision to enter the legally-binding contract of marriage. We approached it as a team, with the goal of a future together in mind. For some, all of this would be incredibly unromantic, but not us. A prenup is the first step of our financial life together as newlyweds.