Purely from a financial perspective, I don't think anyone can argue a prenup isn’t “smart”. But what would have prevented you from discussing those issues and creating those accounts without a prenup?
I don't think anything would have necessarily prevented it. But having a plan we had both agreed to ahead of time made it the default assumption when those things actually came up. The financial issue was actually pretty insignificant. We're talking about like $300k total difference for two people who make more than half of that in just W2 income each year.
We're big planners. We also both recognize that thinking about things with unclouded minds tend to lead to better outcomes than discussing them when somebody suddenly feels a typical human behavioral or emotional response (e.g., loss aversion). It's entirely possible that one or two years into marriage, I may have felt like "hey we're married, that's our money and we've been sharing everything for two years now, maybe it shouldn't be separate." But since we had a contractual default, that never became an issue.
Do I think it's likely it would have? No. Do I know that it definitely didn't? Yes. Do I think the act of an agreement in place is part of why that's true? Yes.
Let me talk through the SAHP thing. My wife is brilliant, and a hard worker. She has a top tier MBA now, and she likes her career. She find fulfillment in it. However, given that I started 3 years before her (we're in the same industry), I'll make double her salary until I leave or until she also makes partner and the gap closes somewhat. All the research we've done says one major reason why women default to SAHP roles is because men make more money and the best financial choice for the family is therefore man work woman home. If she gets put into SAHP because of that, then 10+ years later she could have had this massive earning power that's been short circuited (same for me).
I find less fulfillment from work. I really enjoy teaching and I love basketball (my prior career). If I become the SAHP because I can coach at a local school or university, I never want to look back if something disastrous were to happen and think "Damn, if I'd kept working, I'd have $x instead and could retire and have more freedom." Because if we have kids and I become the SAHP, it's likely that 5 years of me working would have accumulated enough that I think I could retire forever. Those five years of income would be my peak earning years.
We also both despise freeloaders, and people who take advantage of others. And we both want kids, and value a SAHP. So now there's a conundrum, and we wanted to logically think through and lock ourselves into a default mode on this so that when the time came, emotion (e.g., prospects of losing that chance to work or whatever) wouldn't lay into it and either one of us could feel safe becoming a SAHP (and if neither of us wanted to, we wouldn't have to, so it would become moot).
So we put in a clause with a formula for how at every year of SAHP through a certain number (can't recall if it was like 5 or 10), and something about whether those years including the preceding x before an event of divorce, either of us who had elected to become a SAHP would be entitled to enhanced payments, above and beyond alimony/child support, to help them pivot with additional education or training, or to sustain a headhunting search, etc etc to get back on their professional feet. We also included a limit on those number of years, opting to eliminate any additional payments which we were allowed to opt out of under the law so the other person couldn't be vindictive or freeload.
There's more detail in there, but the bottom line is - we designed something so that either one of us would feel comfortable letting go of some pretty big concerns ambitious people tend to have so that we would each be free to prioritize the thing we care about most - family - without anything nagging in the back of the mind, and without any chance for resentment to form that would (in our research) be one of the leading causes of divorce!
In sum: I think our prenup not only protected us in the event of some unforeseen rift, but more importantly materially decreased the opportunity for some of the most common marital problems to actually form, thereby dramatically lowering the chances that we would develop a rift leading to a divorce. Does that mean we never have a fight or disagree? No. but it means that we've already addressed some of the scariest things about committing your life beyond just yourself and to another person instead, which I believe has allowed us to more wholly undertake that commitment.
My wife and I were both broke when we got married 32 years ago.
, but at least it was discussed.
- and we are both happily married.
