A prenuptial agreement is one of the most overlooked yet vital tools in comprehensive financial planning. While many clients may view it as uncomfortable or unnecessary, a well-crafted prenup can be a proactive, intelligent part of holistic financial security.
Why Prenuptial Agreements Belong in Financial Planning Conversations
Prenuptial agreements go beyond preparing for divorce — they promote financial clarity and protection. While often associated with the end of a relationship, a prenup is simply a legal agreement made before marriage that outlines how assets will be managed if the relationship ends.
A prenup safeguards assets and opens up important money conversations. It clarifies property ownership, financial roles, and expectations around income and spending, supporting broader tax, estate and legacy planning. Addressing this early helps clients enter marriage with transparency and well-defined financial intentions.
Just as transparency is lacking in traditional financial institutions — where clients may earn a mere 0.5% on savings while banks charge up to 24.99% in loan interest — couples also face risks when financial expectations in a relationship go unspoken or undefined. A prenup is one way to restore clarity, ensuring that both partners know exactly how financial matters will be handled moving forward.
Core Functions of a Prenuptial Agreement
Think of a prenuptial agreement as a financial blueprint that complements and reinforces your client's other planning documents.
It Defines Property Ownership
A prenuptial agreement clearly defines separate property versus marital property, reducing the risk of future disputes. This is important for protecting legacy wealth and preventing unintended asset division during a divorce or separation.
It Establishes Financial Roles
A prenup outlines how income, expenses and joint accounts will be managed during the marriage. This is critical for couples with differing financial habits, as it sets clear expectations and helps them avoid common sources of financial conflict.
It Sets Expectations for Spousal Support
A prenuptial agreement can define if, when, and how alimony or spousal maintenance will be handled in the event of a separation. This reduces emotional and financial uncertainty, especially if one partner plans to pause or reduce work to support the family or take on caregiving responsibilities.
It Integrates With Estate Planning
Prenuptial agreements should align with estate planning, including provisions for long-term care costs. For example, with skilled nursing care in Pennsylvania averaging over $120,000 per year, a prenup can help protect assets and ensure wealth is preserved for children and beneficiaries, even in the event of high medical expenses.
Initiating the Conversation With Clients
Prenuptial agreements can be a sensitive topic, especially for couples excitedly planning their wedding or looking forward to married life. Present them as a proactive financial planning tool rather than a sign of distrust. Emphasize that a prenup encourages honest conversations about money and future goals, ultimately protecting both parties. Frame it as a way to clarify expectations and prevent future issues, much like insurance.
The topic can fit naturally into discussions of other major life milestones, such as home ownership or joint account setup. You can initiate the discussion by asking if the couple has considered how a prenup might support their financial goals and long-term plans. This makes the topic approachable while reinforcing your advisory value.
Collaborating With Legal Professionals
While financial advisors don’t draft prenuptial agreements, your expertise is critical in guiding the process and ensuring that the final document aligns with the client’s comprehensive financial plan.
Build a Trusted Referral Network
It’s essential to partner with experienced family law attorneys who are well-versed in financial planning and estate law's nuances.
Look for attorneys who understand how prenuptial agreements interact with other financial documents, such as wills, trusts and tax strategies. This allows for a more seamless collaboration where everyone involved works toward the same objective — protecting the client’s interests.
Facilitate Cross-Professional Communication
With your client’s consent, sharing relevant financial plans and documents with their attorney is important. This includes details about assets, liabilities and income streams.
Sharing this information ensures that the attorney’s legal recommendations are informed by the client’s complete financial situation, ensuring the prenup supports financial and legal objectives. This communication also helps prevent misalignments or oversights arising from isolated decision-making.
Aligning Prenuptial Agreements With Long-Term Financial Goals
A prenuptial agreement should evolve alongside your client’s financial life. Revisit it regularly, especially during major income changes, family shifts, estate plan updates or moves to states with different property laws. Coordination between legal and financial professionals ensures the agreement stays aligned with a couple’s goals, assets and intentions.
Make Prenups a Proactive Planning Tool
Helping clients prepare for marriage means planning for the best and the unexpected. By including prenuptial agreements as part of your financial planning process, you promote clarity, reduce risk and support long-term stability.
Related: How To Help Clients Assess Their Readiness for Homeownership