Prenups are smart. Here are some reasons why:
You can opt out of the default California law and prevent your spouse from getting credit for the time, skill, and effort that you put into managing your money during the marriage. A prenup can ensure that any increase in value of property acquired before marriage stays with that person. For example, let’s say you have stock worth $100,000 but after you get married you buy a bunch of Facebook or Uber stock. Now, five years into marriage, your stock portfolio is worth $600,000. A prenup can ensure that the increase in value stays with you. Without a prenup, you would have to split the increase in value with your spouse.
You won’t be stuck with your fiancés debt. A prenup can protect your assets from creditors – which is something the default rules do not protect for. If your fiancé has significant credit card debt, a prenup can ensure that creditors stay away from your property.
You won’t have to worry about creating a partnership interest for your spouse in your business. The default in California law is that your spouse accrues an interest in your business over the course of marriage. A prenup can prevent your prospective spouse from becoming an unwanted business partner at divorce.
You can ensure that choices like relocation, raising a family, and supporting your spouse during grad school are recognized and compensated appropriately in the event of divorce.