Rapid City financial advisor Rick Kahler: Build emotional and financial intimacy with prenup money conversations
Imagine for a moment that you and the love of your life are young, starry-eyed, and newly engaged. Someone asks, “Do you plan to get a prenup?”
You would likely stare at them in stunned disbelief and say something like, “Are you kidding? Of course not! We don’t have anything to split up! Besides, if we wanted to plan for a divorce before we even get married, we shouldn’t be marrying in the first place.”
A prenup, short for a prenuptial agreement, is a written contract signed by partners before they marry (a tradition with a long history as depicted in the public domain 19th century painting above, titled “Signing the Marriage Contract,” as posted on wikimedia commons). It is the financial game plan they agree to follow in the unlikely event the marriage fails, outlining how they will divide their assets, debts, and financial responsibilities in case of a divorce or legal separation. While often associated with protecting significant assets, prenups can benefit any couple, regardless of income level.
For most younger couples with no previous marriages, a written prenup is probably unnecessary. What is essential, though, is having open and honest pre-wedding conversations about both partners’ personal finances and attitudes about money. Considering a prenup can be one way to frame and begin those conversations.
Unfortunately, too many couples fail to have those open and honest money discussions prior to marriage. Many of them regret this mistake, according to a study discussed in a NerdWallet article, “54% of Engaged Americans Disagree With Partner on Financial Goals,” from September 19, 2023. It says, “Three in five married Americans (60%) say there are financial topics they didn’t discuss, but wished they had, before getting married. This could be because more than half of married Americans (53%) say they have found it difficult to have a serious financial conversation with their spouse.” The study also found that 54% of engaged American partners disagree on their financial goals, while 26% regularly argue about money. Fewer than 8% of couples discuss life insurance and wills before marriage.
The reasons for failing to have prenuptial money conversations are emotional rather than financial. They are likely to include fear of conflict, as well as shame over revealing debt or money mistakes. The topic, especially if raised in the context of a formal prenup, may bring up thoughts and feelings around insecurity, a lack of trust, hurt, resentment, anxiety over the future, and a perception of money being more important than love. Different cultural and family expectations and beliefs around money also factor in. For all these reasons, it may be valuable to have these conversations with the support of a counselor or other neutral third party.
I would also encourage focusing on the positive outcome that can result from having a deep, transparent discussion around money. Some of the long-term benefits for a couple can include:
Clarity and security. Knowing the truth about each other’s finances can offer some peace of mind and a sense of control.
Transparency and communication. Openly discussing finances and expectations can strengthen trust between partners and establish a pattern for continued clear communication within the relationship.
Fairness and protection. Both partners may feel protected by considering the assets both bring to the partnership and how those might be dealt with fairly—not only in the event of a divorce, but during the marriage.
Exploring whether a formal prenup is necessary does not equate to assuming a couple “should” have one. The whole point is having open and honest conversations that help build emotional and financial intimacy. When partners are courageous enough to discuss money in this way, with a focus on love and solidifying their commitment to each other, they build a foundation that will help their coupleship thrive both financially and emotionally.
Rick Kahler, CFP, is a fee-only financial planner and financial therapist with a nationwide practice, Kahler Financial Group, based in Rapid City. His co-authored books include Coupleship Inc. and The Financial Wisdom of Ebenezer Scrooge.
