Prenups are generally recommended for both people in a marriage when one partner comes in with a larger amount of wealth than the other. But what about when you’ve built that wealth together for years before you get married?
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Andrea from Ohio recently wrote a letter to The Ramsey Show detailing a problem she’s having with her partner. Andrea explained that they had been together for 25 years and had four kids. During that time, her partner had built a business with over 300 employees and now has millions of dollars. While he’s always taken good care of Andrea and the kids, and Andrea gave up her career 20 years ago to care for the children, the problem is that the couple never married.
Andrea has wanted to tie the knot for decades, but her partner always said no. Now, he said he’s willing, but only if she signs a prenup.
Andrea wanted to know if the Ramsey hosts thought he was wrong to ask her to sign, and the hosts didn’t hold back with their advice. Here’s how marriage can provide financial protection for you as an individual, and what you can do to protect yourself financially if you live with your partner but aren’t married.
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Both Dave Ramsey and cohost John Delony were very displeased with Andrea’s situation, to the point where Delony almost didn’t want to finish reading the letter. Ramsey himself also had harsh words for Andrea about the situation she has found herself in.
"Andrea, you made a really terrible bargain. You gave up everything, and he gave up nothing. You raised his kids and helped him build a business, and he owns it," Ramsey explained. He said that while she should call his bluff and tell him she’s walking away if he doesn’t marry her with no prenup, he doubts she is going to do that, and he believes that the partner is a "jerk."
Ramsey also said that while he really can’t help Andrea now at all because it is too late for her to go back and make different choices, her situation should be a cautionary tale for others. "You’re 24 years old and your boyfriend wants to move in together. I hope you read this email and realize how stupid that is. How unsafe it is and how exposed you are," Ramsey said.
As far as Andrea goes, Ramsey said now the only healthy choice is for her to give her partner an ultimatum and follow through.
"You don’t have any options. Your options are to stay in the poop, or demand that we get married with no prenup or I’m leaving and taking the kids. Which is actually about the only healthy thing to do in this situation. Load up and leave."
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Marriage can provide financial protection
In explaining why he believes marriage is important before moving in together, Ramsey pointed out the many benefits of marriage, including data showing married men live longer, data showing better survival rates for married people after a cancer diagnosis and the fact that married couples typically have a higher net worth than single people.
Marriage also provides important protection for people like Andrea because it creates a legal partnership that you can’t unwind without going to court and having a divorce settlement put in place.
The terms of that settlement agreement are decided by state laws, which either require the fair division of property (in equitable distribution states) or require property acquired during the marriage to be split 50/50 (in community property states).
Regardless of the state-specific rules, when a couple is married, one spouse can’t just walk away and leave the other with nothing. Both equitable distribution and community property rules prevent this, as do rules related to spousal support (alimony) when there is a long marriage with a big income disparity and one person gave up a career for the family, as Andrea did.
How to protect yourself financially if you live together but aren’t married
Marriage can ensure that assets are divided fairly and allow joint access to shared children, but many people may find themselves in a similar situation as Andrea.
If you plan to living together without marriage, you can protect your finances by:
- Create a cohabitation agreement or a written contract that establishes key ground rules like how costs will be shared and what happens to a family home, apartment lease, or shared assets if you separate .
- Make financial decisions as if you are single. For example, don’t commit to renting an apartment you couldn’t afford on your own unless you have an agreement in place to make sure you don’t get stuck with the lease if your partner walks out.
- Be aware of how homes and other properties are titled. If you are contributing to the cost, make sure you are a co-owner of the property.
- Insist on an ownership stake in a family business. If you are helping your partner build a company, make sure you have a legal interest in it. You can organize the company as an S-corp and each own shares, or you can have a formal written partnership agreement specifying joint ownership and what happens if you separate.
Still, if you can’t or don’t want to get married, taking these steps is critical because, as Ramsey points out, the last thing you want is to find yourself decades into a relationship with no career, a bunch of kids and no legal ownership stake in anything you have built together as a family over the years.
The good news is that this kind of financial vulnerability is avoidable, but only if you’re proactive. With clear agreements, shared ownership of major assets, and upfront conversations about money and legal rights, couples who choose not to get married can still build a secure financial foundation together.
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