Countless studies have found that couples are either waiting to get married or not looking at it as the endgame for a committed relationship. However, love is unpredictable and sometimes undergraduate and graduate students will find that they are the exception to this new rule. If marriage is indeed on the horizon for a student, they might want to consider a prenuptial agreement even if they live on a shoestring budget or do not work full time.
Prenuptial agreements are typically designed and drafted as a tool to maintain control of one’s personal finances. These arrangements are often drafted for upper middle income and high income/high net worth couples or those who remarry and already have children and financial plans in place. Sometimes one spouse will have substantially higher income or net worth than the other — that income can become a marital asset once a couple marries unless a prenup is in place.
Thinking about the future
Many believe that are a great idea for student couples. For example, it makes sense if one or both students are in medical school, getting their MBA or pursuing some other professional training that will likely put them in an upper income tax bracket. One needs look no further than the recent divorce announcement of Jeff and MacKenzie Bezos. Nearly all of the couple’s 137 billion estate are marital assets because the couple married before Jeff earned his first million. However, he was an accomplished Princeton graduate with degrees in computers and engineering, which certainly points to lucrative career.
Prenups can also protect a spouse from debt. For example, one student may take great pains to pay for their own schooling as they go and request a prenup because they not feel comfortable with the student loans that the other is taking out to pay for school.
The start to an important conversation
While the conversation may not be a comfortable one at first, discussing a prenuptial agreement can lead to firm financial foundation where the couple clearly outlines their expectations and obligations. Parents may also want to weigh in on the matter, especially if there is a succession plan involving a family business or trust assets.
Each prenup is unique
An individual or a couple can work with a knowledgeable family law attorney to design a binding prenuptial agreement that works for them. Whether designed to address future earning potential, control of a new business started in a dorm room or familial concerns, these agreements allow couples to move forward with fewer doubts about their finances.