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Key takeaways

  • Establishing the value and purpose of a prenuptial agreement can alleviate the stress and emotion surrounding it.

  • Discuss a prenup well before the wedding as part of your overall financial discussions and decisions.

  • Make sure you and your partner have an equal voice and representation when it comes to deciding the terms of the prenup and signing the agreement.

Getting engaged is one of life’s most exciting moments. While it’s easy to get swept up in the joy that a new marriage brings, taking a more pragmatic view of your relationship can serve you well in the long run. And yes, that may include drafting a prenuptial agreement that addresses key issues – like how you’ll divide money and property – if the marriage should end.

To be sure, preparing a prenup doesn’t exactly scream romance. But protecting your family assets, and potentially your business, can save a lot of heartache down the line. What’s more, the very process of discussing your needs and desires can bring both of you peace of mind.

If you decide that a prenup is something that can be beneficial to your relationship, going about it in the right way will ensure that you protect your interests while maintaining harmony in your relationship. 

 

How does a prenup work?

A prenuptial agreement is a written contract that a couple signs before they get married. Prenups cover three primary areas: the division of property, the responsibility for shared debt and the allocation of financial support in the case of a death or divorce. 

Prenups cover three primary areas: the division of property, the responsibility for shared debt and the allocation of financial support in the case of a death or divorce.

Division of property

A prenuptial agreement will often stipulate who owns which assets – including any homes, financial accounts and business interests – that each party brings into the marriage. Typically, it also covers the distribution of assets that the spouses acquire during the marriage, which would otherwise be divided according to state law.

This function can be particularly important in blended family situations. A prenup can ensure, for example, that if you were to die, the children you brought into your new marriage would still receive the inheritance you meant them to have. It can also ensure that a surviving spouse and their existing children would be taken care of financially.

You can help relieve these concerns by discussing expectations and highlighting any concerns you have about your or your children’s financial wellbeing if one partner were to die.

Responsibility for debt

A prenup may also outline who would be responsible for debts that both parties would otherwise pay jointly. For example, the agreement may require that, in the event of a divorce, each spouse is liable for any debts that they incurred before the marriage. Often, it also specifies how the spouses will handle debt that they took on during the marriage.

Financial support

Another purpose for a prenuptial agreement is to specify alimony payments and child support for a spouse if the couple were to divorce. In general, courts will follow the prenup when it comes to these matters, rather than going with the state’s default rules.

By preparing a prenup, you’re deliberately and consciously making premarital decisions about potential support for your spouse, rather than leaving this to the state to decide for you.

 

How to draw up a prenuptial agreement

Nobody goes into a marriage expecting their union to dissolve. But should life throw you a curveball, a well-drafted prenuptial agreement can help ensure fairness and peace of mind for both spouses. These tips will help you navigate the prenup process with confidence.

Hire separate lawyers

Some states require both spouses to have independent legal counsel for the prenup to be valid. But even when it’s not a requirement, an experienced lawyer can help you avoid potential challenges to its validity such as if one party fails to disclose all their assets or if the contract includes terms that are patently unfair to one party.

Be transparent

Forgetting to include financial assets in the prenup can lead to the entire agreement being challenged or even thrown out in court. Being as thorough as possible can help ensure that the prenup is valid and that both parties have complete trust in one another.

Before drafting a prenup with your lawyer, gather all your banking and investment statements, as well as your most recent tax returns. Also provide information about any other substantial assets you have, such as real estate deeds, vehicle titles and high-value items such as jewelry or collectibles. Additionally, you’ll want to give your attorney documents showing any loan balances for which you’re responsible.

Account for future changes

Your financial situation is almost certainly going evolve over the course of your marriage. When writing a prenup, planning for those potential changes is critical.

Your attorney can add specific language that addresses future events to protect your financial interests. Should an unforeseen scenario arise, you can always make amendments to the agreement after the wedding.

Obtain valid signatures

For a prenup to be valid, the agreement has to be in writing. It must also be signed by both individuals and notarized.

A judge can dismiss a prenup if they determine that one of the spouses was pressured into the contract. To ensure that doesn’t happen, both individuals should review and sign the agreement well before their wedding date.

 

Start the prenup conversation early

Even in the most solid of relationships, expressing your desire for a prenuptial agreement can be a tricky topic. However, the conversation almost always goes more smoothly when you bring it up earlier rather than later.

For one, your partner is more likely to feel respected if you’re completely upfront about your financial concerns. Explain that your desire for certain protections doesn’t stem from a lack of trust, but rather a realistic desire to protect the financial wellbeing of both of you.

With months, rather than weeks, to draft an agreement, you’ll have time to think through the relevant issues without the added pressure of an impending ceremony.

Your timing is critical for legal reasons as well. Signing a prenup fewer than 30 days before the wedding will result in some state courts invalidating the agreement, as it raises questions about whether the contract was established under duress. Even in states that allow a shorter window, going through the process earlier gives everyone involved plenty of time to talk with an attorney and negotiate the contents of the agreement.

Frequently asked questions

The cost to create a prenup depends on how you go about the process. If you choose a DIY approach, you can find templates online, some of which are free. However, these generally aren’t tailored to the laws of each state. And without an attorney to help you along, you’re more likely to omit information or make other errors that could prove costly in the long run.

Generally, it will cost between $1,000 and $10,000 for a prenuptial agreement. The exact cost depends on where you live, the complexity of your finances and the amount of negotiation that needs to take place between the spouses. 

Yes, a court can toss out a prenuptial agreement for several reasons. For example, it may determine that the agreement lacked full disclosure of financial assets and debts, that it was signed under duress or that the parties lacked independent legal counsel.

To ensure that the prenup is enforceable, you and your partner should start the process as early as possible and hire separate attorneys who are experienced in family law.  

Prenuptial agreements are valid in all 50 states, although the laws pertaining to their enforcement can vary when you cross state lines. You may decide to include a “choice of law” provision that spells out which state’s laws will govern the interpretation of the contract, even if you move to a different state. Otherwise, the court in which you file for divorce will have to determine which state laws apply based on where you wrote the prenup or other factors.

Because of the potential for future complications, you should consult your attorney about where to file if you and your partner live in different states. 

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