What is a Prenup?
Prenuptial Agreements are contracts entered into by couples prior to and in anticipation of marriage. They may also be called Antenuptial Agreements. A well-drafted Prenuptial Agreement sets out the terms of the couple's assets and debts, including property and future earnings and how they should be distributed if the marriage is dissolved.
Do I need a Prenup?
A prenup is usually a good idea. Approximately:
- 41%-50% of first-time marriages end in divorce
- 60-67% of second marriages end in divorce
- Approx. 74% of third marriages fail
Divorcing couples with a valid prenuptial agreement minimize conflict and legal costs. A well-drafted prenup helps both spouses lessen the emotional turmoil of the separation and divorce process. Every marrying couple should at least consider getting a prenup.
Do I really need a prenup if I am not wealthy?
Partners with modest assets can benefit from a prenup in the event that one spouse foregoes their career to care for children or one spouse supports the other while they increase their earning potential. Life is unpredictable. A prenup can allow couples to contemplate eventualities while they are in a love state of mind.
When are prenups especially necessary?
- Second or third marriages, especially if there are children from previous marriages;
- Marriages in which someone holds or has accumulated significant or complicated debts or assets;
- Marriages in which the spouses are mature or have serious health concerns;
- Marriages in which either or both spouses become or plan to become engaged in a financially risky profession.
What Are Some Common Features of a Prenup?
The agreement may outline what property is separate and what property is marital. The prenup can protect one another from each other's debts. There may be a clause on alimony, to determine the level of support owed to a spouse. There may be information on child inheritance, which is especially relevant if one of the spouses was in a prior marriage; terms on child inheritance will ensure that the children can keep a portion of the estate rather than go directly to the other spouse. There may be provisions that express which jurisdiction will host a divorce or separation proceeding and to determine which laws will cover the issue, which is in fact two different issues. The agreement can incorporate any issues that are important to the parties.
Does a Premarital Agreement mean we don't trust each other?
Prenups are not romantic contracts but discussing a premarital agreement should be an important part of every couple's wedding planning process. An important benefit of entering into a premarital agreement is that it forces a couple to have a candid discussion about their expectations in the event the marriage doesn't last forever, which helps them get to know and understand each other that much better before saying “I do”. When a marrying couple can meaningfully discuss and agree on what happens if their marriage doesn't work discussing a prenup can show that the spouses trust each other, and they can enter the marriage with more confidence.
What are the Pros and Cons of Signing a Prenuptial Agreement?
- Documents each spouse's separate or marital property, both assets, and debt.
- Distinguishes between community property and separate property.
- Documents any agreements between the spouses.
- Can be used in conjunction with or to supersede an estate plan.
- It May help in avoiding costly court costs and lengthy litigation.
- When one party has a vastly superior estate, feelings of fear and resentment infect the relationship when expectations do not match.
- Vastly divergent negotiation skills cause an imbalance of power.
- Talks of long-term goals may be premature and uninformed.
What happens if I don't have a prenup?
The divorce laws of your state will determine who is entitled to what. This means that retirement benefits may be divided. This also means that a spouse may have a claim for alimony or spousal support.
How much will a prenup cost?
A simple prenup can cost between $1500 - $2500. A complicated prenup with significant negotiation will be prepared at an hourly rate.
How much does it cost to review a prenup?
A simple prenup can be reviewed for a little as $750. If extensive negotiation is required, the fee will likely be hourly.
Can I skip the lawyer fees and D.I.Y. my prenup?
Can you? Yes. Should you? No. A prenup can be difficult to enforce unless you have your own attorney write it and your fiancé has their attorney review it. A premarital agreement can be difficult to enforce if the correct language is not used. At the least, have an attorney review your contract before it is signed to ensure that the agreement contains the correct language and that nothing is missing. Some states require the parties to have separate legal representation and pay their own legal fees.
We did not get a prenup before we got married, is it too late to get one now?
It is too late for Prenuptial Agreement but you can create a Postnuptial Agreement, similar to a prenup but executed after the date of marriage.
Can we change the prenup later?
Yes, if both parties agree to it. You can also include a sunset date in the prenup. Some couples draft prenups that expire after 10 years, for example. If you chose an expiration date, the couple should then revisit the conditions of the prenup.
Does a prenup mean I won't get alimony?
A prenup can provide for some guaranteed amount of alimony, or none at all. It is your choice. You and your fiancé can agree on:
- some fixed or varying amount of alimony
- some alimony if needed
- alimony for a period of time or until something happens
- amending the prenup to provide some alimony if one spouse quits work to take care of the kids, etc.; or
- no alimony at all.
Are prenups enforceable?
Yes, if it is prepared and executed in accordance with the applicable law. Most states have adopted the Uniform Premarital Agreement Act, making prenups valid and enforceable if done correctly and in compliance with the law. It can make the divorce process go much smoother and faster—and hopefully save you money in the process.
When is a prenup unenforceable?
Terms that violate a parties' constitutional rights or are contrary to public policy are unenforceable. Examples of terms that may be unenforceable are:
- automatically giving one party custody.
- waiver of child support.
- restriction of the free exercise of religion.
Does adultery void a prenup?
A premarital agreement can address adultery as a condition for a more favorable distribution to the other party in case of divorce. However, prenups are not made invalid by adultery or any other grounds of wrongdoing in the marriage.
How long does a prenup last?
The couple can dictate that the prenuptial agreement only remains in force during a certain number of years of the marriage or until formally modified. Another option is to include terms that dictate that specific property categorized as separate becomes marital property after a certain amount of time.
Can a prenup be cancelled?
If circumstances change and both parties approve, a premarital agreement can be canceled or changed. Amendments can be added to modify the agreement. The amendments must be signed by both parties and notarized by a public notary and should be written by or reviewed by an experienced attorney.