Considering a Prenup? Here’s Everything You Need to Know

“Discussing a prenup forces partners to communicate their financial goals, their general attitudes about money, their spending and saving habits, and any accrued debts,” says Roxas. “And since money issues are one of the leading causes of divorce, having these conversations before getting married can help build the foundation for a stronger and long-lasting union.”

“At first, my prenuptial agreement felt one-sided—my husband Ted is divorced and has kids from previous marriages,” says California-based Karina von Middendorf, who herself got married for the first time this past November. “Putting together our prenup ended up being a months-long process that involved disagreements and back-and-forth. But, in the end, going through the process was helpful as it clarified what our marriage and financial future would look like.”

Experts agree a prenup can actually be a wise investment, not only because it outlines a couple’s finances, but because it can thwart a costly and contentious divorce if the marriage doesn’t work out. Here, we’ve created a guide to help answer your questions when it comes to navigating a prenup.

How Much Does a Prenup Cost?

It can range anywhere from $1,500 to $10,000, plus more if the estate is incredibly complicated. “A simple agreement can be drafted for a flat fee,” says Alyease Jones, Esq. a family law attorney based in Chicago, Illinois. “But for more complicated matters, attorneys will typically charge their hourly rate.”

Postnuptial agreements may be more costly because the parties are now married, and marital property must be considered. “The process may seem annoying, expensive, and even unnecessary, but if there’s a divorce, a well-drafted agreement can be worth its weight in gold,” says Elizabeth Green Lindsey, Esq., a Domestic Relations and Family Law lawyer based in Atlanta, Georgia and President of the American Academy of Matrimonial Lawyers.

Prenup vs. Postnup

Postnuptial agreements are similar to prenuptial agreements but occur during the marriage after the parties have tied the knot. “They’re just as enforceable as prenuptial agreements,” says Lindsey. “The reasons for getting one vary—sometimes parties who were unable to finish negotiating the prenuptial agreement prior to the wedding will come back to it after the wedding, sometimes an inheritance is forthcoming and the parties want to address it, sometimes a large liquidity event, like the sale of a company, is about to take place and the parties want to address what happens with the proceeds.”

Who Needs a Prenup?

There are some justifiable circumstances that may require a prenup, including:

One or both parties has already been married.

Previously married parties, especially those who suffered through an extended and bitter divorce, may not be willing to marry again without knowing what their financial future holds. “They’re aware of the problems that can occur during the divorce process and don’t want a repeat scenario,” says Lois Brenner, Esq. a matrimonial attorney and mediator in New York City. “This is especially true if someone feels their ex took advantage of them or got a better deal in a prior divorce.” Plus, a previous divorce can affect any future rights and obligations pursuant to a divorce decree or judgment, notes Jones.

One or both parties have children.

Oftentimes, a party will want to protect the financial interests of children from a previous marriage. “The premarital agreement can ensure that assets remain separate property and allow the party to create a living trust or will to provide for his or her children in the event of death,” says Roxas.

Having a premarital agreement may prevent a fight over a will if a parent dies. “For example, in New York State, you must leave something to your spouse, no matter what you say in your will. A prenuptial agreement can allow a couple to supersede this law,” says Brenner.

One party is wealthier.

Prenuptial agreements often come into play when there’s a disparity in wealth between the two parties. “A person marrying into money may have a significantly improved lifestyle, which, absent a prenuptial agreement, can create rights for spousal support and property division down the road,” says Lindsey. “There are some who believe having a prenuptial agreement assures that the parties are not marrying for money.”

Although, generally speaking, it’s the party with the higher earning potential or more property who will ask for the agreement, the premarital agreement can be beneficial to both parties. “There have been situations where my clients were asked by their wealthier fiancées to sign a premarital agreement. However, during the marriage term, my clients become the wealthier party and the agreement ends up protecting them as well,” says Roxas.

One party has more debt.

A 2019 Love & Money survey from TD Bank showed 27% of millennials currently keep a financial secret from their partner, namely significant credit card debt. “Premarital debts are usually paid by the person who incurred them. However, debts incurred during the marriage may often be allocated to both spouses, putting the non-debtor spouse at a disadvantage,” says Brenner. If one party has a habit of spending money, and the other party does not want to be responsible for debt incurred during the marriage, then a premarital agreement can help ensure that this does not happen, adds Roxas.

The prenup can require that no premarital debts of one spouse can be paid from the joint community property of the marriage or that during the marriage, one spouse’s business debts cannot be paid from joint funds, adds Barry Schneider, Esq., a divorce and family law attorney in San Francisco, California. “Without a prenup, creditors have ways of collecting premarital debts from later acquired joint assets.”

One or both parties own a business.

If you own a business before the marriage, a prenuptial agreement can make sense as a divorce can destroy a family business. Plus, if you own a business with other people, their share of the business may also be impacted by your divorce. A premarital agreement can allow the party to have full discretion over how to manage their business now and in the future. “If one spouse has built up a business pre-marriage, that spouse may want to limit the other spouse from acquiring an interest in the business during marriage,” says Schneider. “Forensic accounting problems arise when a business increases in value during marriage and one spouse wants a share of that business increase. A prenup can quantify what that interest is, or it may allow the owning spouse to keep the business outright no matter what contributions were made during the marriage.”

The costs of business valuation and the burden of litigation over business issues can be expensive and time-consuming. A prenup will save both money and time.

One or both parties want to keep their personal life private.

The right to privacy is recognized in prenuptial agreements. “The parties can agree that without the prior written consent of the other party, neither shall disclose, intentionally publish, or provide information or documentation to any other individual or entity,” says Roxas. There are often confidentiality clauses in prenuptial agreements to prevent, for example, social media exposure and tell-all books. “The parties can also contract to have any disputes handled by arbitration and therefore kept out of the public eye,” says Lindsey.

One or both parties has an inheritance to protect.

Generational wealth and future inheritance are two reasons why someone may want a premarital agreement. “If a party to the marriage receives an inheritance, it will be his or her non-marital property, unless he or she does something to make it marital—such as putting the funds in a jointly titled account or buying a piece of real estate in both names,” says Roxas. “The best way to avoid any unintentional transmutation of inheritance is to always maintain the inheritance in a separate account and only in the name of the person who inherited. That being said, a prenuptial agreement can, and often do, clarify the inheritance of a party remains his or her non-marital property.”

One party plans on being a stay-at-home parent.

“If a party plans to be a stay-at-home parent, a prenuptial agreement can provide security that this spouse will be treated fairly in the event of a divorce. “A stay-at-home parent is foregoing work or career advancement to raise a child and this puts him or her at a disadvantage in the workplace should the marriage fail later,” says Brenner. “Couples often choose to compensate for this, if they can afford to, by providing a sufficient income stream and/or property to guarantee the homemaker a comfortable lifestyle or income after the child-rearing years are over if the marriage ends in divorce.”
Roxas agrees, saying, “A premarital agreement can protect the stay-at-home parent if the party is able to negotiate terms—such as an annual anniversary gift, an annual contribution to an IRA, a life insurance policy, or a monthly mandatory monetary contribution to a joint account by the spouse.”

Prenup FAQs

Experts answer the most frequently asked questions pertaining to prenups.

When should someone begin the process of a prenup?

As soon as possible as there are benefits to having frank conversations early when emotions are not running high. “You don’t want the added stress of discussing your premarital contract with your spouse or attorney close to your wedding date,” says Jones. “The time frame for entering a prenuptial agreement is different for every couple, but I suggest finalizing one at least 30 days prior to the wedding date. Most engaged couples keep a checklist of items that need to be completed prior to the big day—finalizing your prenuptial agreement should be on that list.”

Usually, the party who earns the most income and/or has more assets would retain an attorney to prepare the premarital agreement. “Then the other party would retain separate counsel to review and negotiate the terms of the agreement and make suggestions for possible changes and edits,” notes Roxas.

The final draft of the prenup must be presented to the party whose attorney has not drafted the agreement at least seven days before the prenup is signed. “Once a draft has been approved by everyone, they and their respective attorneys would execute the agreement,” says Schneider. It must be shown the parties had the legal capacity to enter into a contract and that it was not entered into by fraud, duress, or undue influence.

What’s the best way to initiate the prenup conversation?

Many partners are uncomfortable addressing prenups out of fear they will do harm to their relationship or offend their future spouse. “However, to have a successful marriage, it’s essential couples be able to communicate well, even when it comes to unpleasant topics. If they can have this conversation, and have it in a healthy way, it says a lot about what they’ll be able to handle in the future,” says Marcia Kimeldorf, Ph.D., a psychologist and the Director of Clinical Services at the Center for Anxiety in New York City.

“I advise the person who broaches the topic to make it clear it’s only being discussed and created as a precaution, and that he or she strongly hopes the issue will never come up and the marriage will last forever. It’s essential both sides feel valued and heard, even if the emotions stirred up are ones of hurt,” notes Kimeldorf. “The person who initiates a prenup should negotiate as lovingly as possible, with each other’s best interests at heart.” When the conversation does take place, be prepared to listen and try to understand your partner’s perspective without interrupting. “Ask for what you want clearly, but be open to new ideas and compromises,” notes Kimeldorf.

By discussing expectations and differences about money before marriage, partners can learn to more effectively understand and support each other throughout the marriage. “As importantly, if a discussion regarding finances uncovers a red flag or a hot button issue, there’s value in the couple dealing with it before marrying. Because more often than not, an issue that one person lets slide as ‘not that big of a deal’ can snowball and become a bigger issue over time,” says Kimeldorf.

Finally, when proposing a prenup, remember the goal is not to have the same views but to come to a place of understanding, empathy, and agreement regarding how differences will be addressed. “Some couples in premarital conflict cases can benefit by discussing these issues in therapy sessions,” adds Schneider.

Do you need separate lawyers?

“I strongly recommend each partner retain their own attorney,” says Jones. “A lawyer representing both parties is presented with a conflict of interest, and one party without counsel can be at a grave disadvantage.” Having separate attorneys will also make it more difficult for one party to challenge the provisions in the future, adds Roxas.

Can you set the terms for child support and custody in a prenup?

“Most states hold that there are public policy concerns over child custody and support and the courts are not required to enforce any provision in a prenuptial agreement which attempts to cover those issues,” says Lindsey. “The courts will have to make a decision on the best interests of the child at the time of the divorce. Therefore, because it might void an agreement to address those provisions in the prenuptial agreement, most practitioners do not include child support and custody in prenups. In fact, some states will strike any provisions about child support if the prenuptial agreement attempts to address the issue.”

Clauses concerning pets are now common in prenups and many states recognize custody of pets in divorce decrees. “It's interesting how a divorce settlement can be amicable when it comes to the financial issues, yet there’s a great deal of conflict revolving around who gets the mini golden doodle!” says Schneider. “There’s now a California law stating pets, to a great extent, can be considered children, so more people are including a pet clause in their prenuptial agreements.”

Can you create your own prenup?

Couples may not understand all of the legal ambiguities of an online prenuptial agreement. “An online form may be a useful stimulus to start you thinking about options, but if you’re going ahead with a prenuptial agreement, you’ll want to make sure to can achieve its intended goals,” says Lindsey. “The enforceability of a DYI prenuptial agreement will depend entirely on whether it meets the criteria of that state’s laws. How can you tell if it meets your state’s requirements to be enforceable? By hiring a lawyer!”
It is possible to write your own prenuptial agreement just as you can a do-it-yourself divorce. “But there are many subtle and not so subtle details that must be considered that a layperson may not think of or be able to figure out,” agrees Brenner. “It may not be worth the risk that something will be incorrect or overlooked and come back to haunt you.” In fact, parties are usually more successful in challenging the validity of an agreement when they have drafted their own premarital agreement without legal counsel, warns Roxas.

What if one party won’t sign the prenup?

It’s a good idea to memorialize proof of premarital property before you get married to show what you brought into the union. “Although every state provides some protection of the assets that you brought into the marriage or received as gifts and/or inherited during the marriage, it’s always a good idea to keep records to demonstrate what you owned at the time of the marriage or when you received a gift and/or inheritance,” says Lindsey. “And remember, many financial institutions only keep records for seven years, so be sure to keep your statements in a safe place or back them up digitally.”