Couples who get married typically do so with the hope and intention that their union will last a lifetime. Nevertheless, some marriages will inevitably end in divorce, with data showing there were 2.5 divorces per 1,000 people in the United States in 2021.
The process of going through a divorce is often time-consuming, stressful and expensive. However, there’s one tool that may greatly simplify the process: a prenuptial agreement.
Many people have heard of prenuptial agreements but may not fully understand what they are or how they might benefit from one. Use our guide below to learn about prenuptial agreements in more detail, including what they are, the benefits and cost of creating one and when you might want to consider having an attorney assist with the process.
What is a prenup?
A prenuptial agreement, also known as a prenup, is a type of legal contract some couples sign before they marry. The purpose of a prenup is to define each party’s rights and responsibilities should they ever divorce.
How prenups work and what they cover
A prenup is a legally binding document. Thus, a valid prenup allows a couple to determine in advance how they want to handle certain topics that must be addressed if they ever choose to terminate their marriage.
Prenuptial agreements commonly cover topics such as:
- Division of the couple’s property, assets and debts
- Amounts and durations of alimony or spousal support that one party will pay to the other
- Division of business ownership and interests
- Protection or distribution of inheritance rights
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Benefits of a prenup
There are many benefits of entering into a prenuptial agreement. For example, a prenup may:
- Provide the parties with asset and debt protection
- Help preserve family wealth and inheritances belonging to one spouse
- Facilitate and encourage open and transparent discussions between the parties regarding their finances
- Set expectations about the division and distribution of property
- Help avoid the possibility of disputes during the divorce process
- Reduce the amount of time and expense necessary to finalize the divorce
Who can benefit from a prenuptial agreement?
A common misconception is that prenups are used primarily by the rich and famous. However, this isn’t always the case.
In fact, many couples may benefit from a prenuptial agreement, no matter their financial status. A prenup may often reduce or prevent disputes in a divorce, so it’s always worth considering before you get married.
How to create a valid prenuptial agreement
The precise requirements for a valid prenuptial agreement vary from state to state, so check the laws of your jurisdiction before creating and finalizing your prenup.
There’s no exact way to create a valid prenup, since each couple and their circumstances is unique. That said, creating a prenup may include the following steps:
- Open and honest communication with your partner about your finances, intentions and goals in creating a prenuptial agreement
- Transparent and complete disclosure and exchange of each party’s financial information, including all assets, debts, property interests, income and other relevant information
- Initial drafting of the prenuptial agreement, ensuring it addresses all items previously discussed and desired by the parties
- Review of the agreement and negotiation of any disputed or unclear terms
- Revisions where necessary to ensure that the agreement accurately reflects the needs and intentions of both parties
- Finalization and signing of the prenup in accordance with the requirements of your particular jurisdiction
- Storage of the finalized copy in a safe location where it can be easily accessed in the future
Cost of creating a prenup
The average cost of creating a prenuptial agreement may range from several hundred to several thousand dollars. The cost varies depending on a number of factors such as:
- The state in which you are located
- The complexity of your finances
- Whether and to what extent there are any disputed items between you and your fiance
- The level of detail required for the agreement
- Whether you work with a lawyer
In many cases, the expense of creating a prenup is still significantly lower than the cost of litigation in case of divorce, which currently may range from $15,000 to $30,000, on average. Thus, the cost of creating a prenup now has the potential to save you thousands of dollars later on down the line.
Should I get a prenup?
Whether you should get a prenup is a personal decision that depends on your circumstances. For instance, people with significant assets or large expected inheritances may be more likely to consider one. Couples with large age or income disparities, older couples and remarried couples may also benefit from a prenup. Many people find it advantageous to ask an attorney whether a prenup would make legal sense given their financial situation.
Do I need an attorney to create a prenup?
Some parties may be able to draft a valid prenuptial agreement without the assistance of a lawyer. However, others may prefer engaging an attorney. Advantages of hiring a lawyer to assist with creating a prenup may include:
- Legal expertise, guidance and counsel
- Knowledge of legal requirements in your specific jurisdiction
- Greater flexibility and control over drafting particular terms and provisions, as compared to using a template found online
- Reduced risk of unequal bargaining power or representation
While hiring an attorney may certainly be beneficial, doing so may not be right for all couples. If you do choose to create a prenup on your own without the assistance of legal counsel, it’s important to research the laws of your jurisdiction and take sufficient time to carefully draft a clear, comprehensive and legally compliant agreement.
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Can you make changes to a prenup?
Most states allow you to make changes to a prenup. In fact, it’s not uncommon for couples to decide that some of their prenup provisions need to be tweaked as their circumstances change. Some common reasons for amending a prenup are to account for children born into the marriage and to address a significant change in finances that you didn’t anticipate when you were engaged.
Any amendment should address the specific thing(s) you want to change and be added to your existing agreement. Both parties need to sign the amendment, and you need to follow the same rules you did in creating the original prenup to ensure that the amendment is valid.
Be aware that courts may scrutinize amendments made to a prenup after marriage more closely due to concerns about one spouse being able to coerce the other into signing.
If you’re in a state that restricts postnuptial agreements, you may be permitted to revoke your prenup altogether, but you won’t be able to make changes after marriage.
When to speak with an attorney
Where one or both parties have significant assets, debts or family wealth and inheritance rights, a detailed and well-drafted prenup may be helpful to effectively detailing and protecting the interests of the parties. In these and other more complex cases, having a family law attorney experienced with prenups may help you meet your needs and goals.
