Prenups get a bad rap. Here’s why they shouldn’t

This article has been updated from a previous version.

Historically, prenups have been framed as an insult to women, who, it’s thought, can only be after one thing if they marry a wealthy man: his money.  

The gender wage gap between Canadian men and women narrowed by 5.9 per cent between 2007 and 2022. And with women increasingly becoming the higher earners in relationships, this notion is beginning to change. 

Despina Zanganas can attest to that. When the real estate consultant was younger, she was the one with all the money to lose in her relationship. When her partner moved in with her, she didn't know how to approach the prenup conversation with him, so she ignored it.  

Thankfully, when they broke up, nothing financially devastating happened. 

“It was a clean split,” she says. “But I was terrified because I thought that he could potentially come after me.” 

A lot of Zanganas’ clients believe they’re going to meet their soulmate, get married and live happily ever after. “Whenever I hear that I cringe a little bit,” she says. “You could be with somebody for the rest of your life, but what if you’re not?” 

Society tends to distract us by making us think love will conquer all. But the statistics show that one of the top contributors to marital conflict is because of financial problems.  

Why then do we bury our heads in the sand when it comes to setting up financial contracts? Prenups are a great way to protect yourself, but they’ve earned a pretty lousy reputation. Before you write them off for good, educate yourself about these common prenup myths. 

Related: Six financial signs your relationship is headed to the next level 

Myth #1: Prenups aren't romantic 

Sarah Zandbergen is the executive producer at Quill Inc., and she thinks it’s time to flip the script on prenups.  

“At the end of the day, marriage is a legal contract,” she says. “This is your spouse. You should be able to talk about anything. Maybe that's an over-romanticized notion but I think that these types of conversations are absolutely important, especially when you're combining lives and income.” 

Our reluctance to talk about money openly in general makes us uncomfortable talking about it with a partner. But marriage is not just an emotional commitment — it’s also a financial one. 

Jackie Porter, owner of Team Jackie Porter, and an award-winning certified financial planner recommends that people get “financially naked” (not to be mistaken with our series) with their partner. 

“Doing this is just as important as the rest,” says Porter. “Throughout a relationship, your financial circumstances with your partner will change. So, you really need to get comfortable talking about money right from the beginning.”  

We usually wait to have these conversations when we're already upset and/or mad. If you haven't had a conversation about money with your prospective spouse or common-law partner, and then just before the wedding you take out a prenup, your relationship is bound to get tested. 

“If you wait until the day after the wedding [to discuss finances], I'm telling you right now the honeymoon’s gonna be over real fast,” says Porter.  

Naysayers believe signing a prenup means you've got one foot out of the door in the relationship before even walking down the aisle and are destined to get divorced. But Porter says there's nothing wrong with looking out for yourself.  

“That's actually a beautiful way to tribute yourself and that person in a relationship,” she adds. 

If you don’t know where to start the conversation, though, Porter suggests the following script:  

“Now that we're talking about moving forward long-term, let's talk about our finances because I know this is one of the reasons why people divorce, and I don't want that to be us. I want our relationship to succeed. So, here's where I'm at financially. And I really need to know where you're at.” 

Related: I made bad financial decisions in hopes of fixing my marriage 

Myth #2: Prenups are exclusively for the rich 

We often see prenups presented in movies and on television as being exclusively for people with a lot of money at stake. But in reality, they’re for anyone who is concerned about protecting their assets, including inheritance, savings and real estate, and division of property if things go left. 

Diana Isaac, a partner at Shulman & Partners LLP, says it's about understanding what’s at risk. 

“A lot of people don't even realize when they're married that their pension is divisible,” says Isaac. “Something so fundamental and basic, they're like, ‘what do you mean? The pension is what I worked for. Why would I share that?’” 

No matter your income, you still have something to lose if things don’t work out. For example, do you share a pet? Who gets the fur baby in the event of a breakup? If you own a car together, who's responsible for paying it off if you split? These are things you can lay out in a prenuptial agreement. What if you work together? Say, if you create content together and own a YouTube channel or an Instagram page, who gets to keep the ad revenue? 

“It's on a case-by-case basis,” says Isaac. “But if in doubt, meet with a lawyer and speak to them to see what assets or debts or income you want to protect.” 

Isaac says she cannot overemphasize having that preliminary discussion to take stock of what’s at risk. “Apart from assets and income, do you expect one to be out of the workforce and part of a domestic economy, or are you both going to be working?” she says. “Are you running a business together? There’s a lot to consider.” 

Porter puts it a different way. 

“If you have less you actually have more to lose,” she says, explaining that the chances of you making the money back, especially if you’re the woman in the relationship, are slim.  

. One reason reason for this is that women are getting married later, and therefore taking time off to take care of children in their prime earning years.  

“People worry about the market crashing and about things like the coronavirus, but the thing that you're likely to not financially recover from is a divorce,” says Porter. 

Myth #3: Prenups are only for married couples 

We spend the bulk of our time discussing the cost of divorce, but there are also financial implications for unmarried couples in common-law relationships. 

Partners who plan on moving in together, for example, should consider getting a domestic contract that states the rights of each person to protect both parties known as a cohabitation agreement. It can cover everything from separation of assets, debt responsibility, what happens to the joint account, car or pet.  

“There could be a partner who is really angry and may potentially sabotage a house sale,” explains Zanganas. “If you have the conversation beforehand you can avoid those kinds of things because the emotion is taken out of it.” 

Women especially should ask these questions and have a written agreement somewhere and know how a breakup could impact them financially.  

“It's kind of like insurance, right?” says Zanganas. “You don't get travel insurance because you think you're going to get sick; you get it just in case.” 

Read next: Is it possible to recover from financial infidelity?