Something Old, New, Borrowed, Blue and….

Laurie Kramer, CFP® |
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Financial Planning Focus

… a prenuptial agreement. Traditions are fun and meaningful, but a prenuptial could prove a great catalyst for a good marriage. Prenuptial agreements have often been labeled as an implication of distrust or premeditation of divorce. But consider this: Do you have homeowners’ insurance because you are planning to set fire to your home? I certainly hope not. Do you have auto insurance because you are planning on wrecking your car? Of course not. Insurance is an arrangement with a company to provide a guarantee of compensation for a specified loss, damage, illness, or death in return for payment of a premium.

In this regard, a prenuptial agreement can be viewed akin to insurance – a written arrangement with your betrothed that provides for the disposition of assets (compensation) should there be a dissolution of the marriage (loss). For the vast majority, divorce is not the end game. But just like faulty wiring causing a fire, or another vehicle suddenly pulling out in front of you results in a crash, unforeseen things happen that can necessitate divorce.

One benefit of having an agreement or insurance is that both provide a guaranteed outcome when unexpected events cause trauma. I am sure we have all witnessed people act in ways we could not predict when emotions are running high. Having the safety net of a predictable outcome during these times can be comforting, ultimately saving people from making (as many) emotionally charged decisions.

The key elements of a prenuptial agreement can launch necessary discussion for the bride and groom to be, starting with full disclosure of their current financial information. This level of transparency sets a great precedent for open financial discussions throughout the marriage and is another important benefit.

Prenuptial agreements generally have provisions for asset and property division, debt protection, spousal support, inheritance and estate planning, and business interests. The clarity a prenuptial agreement provides can be very valuable in reducing conflicts in both good and bad times. Also, a well-crafted agreement should ensure that both partners feel protected.

Here at West Financial Services, we are starting to get more involved in supporting negotiations for fair prenuptial agreements through analysis of various settlement options. In general, this analysis starts with reviewing the client’s current financial status and discussing what the couple’s shared future looks like. This can include estimating value of shared housing, how many children they may want to have, thoughts on working after having children, how expenses may be divided during marriage, etc. Then we start evaluating what our client may need in terms of financial settlement to maintain their lifestyle should the marriage not succeed. Usually, the lawyers negotiating the agreement will provide a framework, which we then model out and determine the likelihood of success for our client. If the proposed settlement works at the five-year mark, then it is usually successful at the 10- and 15-year marks, as well. If at five years the proposed settlement is insufficient, then we start looking at options that may include a larger lump sum payment or housing allowance, for example. By collaborating with the lawyers on behalf of our shared clients, we hope to help arrive at a workable and fair deal.

With so many marriages starting later in life when wealth has accumulated, and the immense transfer of assets to younger generations, it is time to shed the stigma once associated with prenuptial agreements. We are also here to help – though an attorney must write the agreement, we can help with financial planning scenarios that can bring each partner security and peace of mind.

Meet Laurie Kramer, CFP® and Kristan Anderson, CEBS®, CFP®

Read the May 2026 Financial Planning Focus:

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