Prenuptial Agreement: Everything You Need to Know

Forget the hassle of misunderstandings of assets division after a divorce with prenup agreements at hand.

Prenuptial Agreement.png


With the stigma associated with prenuptial agreements, some may be hesitant to create one and sign it. Additionally, some people even consider it a red flag. However, in a broader perspective, a prenuptial agreement initiates honest conversations on financial situations before marriage. This article tackles the necessary elements of a prenuptial agreement and provides an overview of how a prenuptial agreement sample looks. 

How does a prenuptial agreement work?

Couples create a prenuptial agreement or prenup, generally before marriage. Using this type of contract, they will determine how to divide their assets if they end their marriage. In that case, the document can also serve as a financial tool. In general, prenups are accepted and legal in all fifty states in the United States. However, every state might vary in how they interpret the agreement. 

Some critics argue that having a prenuptial agreement is unromantic, and the uncomfortable procedure can doom a marriage before it starts. On the flip side, prenups can also save possible heartaches and a considerable amount of money in case of divorce. More importantly, these agreements can prevent hefty and expensive court battles. Since all are being laid out in a document, every party knows who gets what, taking away the possibility of nasty arguments.

Elements the document covers

Looking at a prenuptial agreement template, you need to ensure that the document covers the following vital factors. 

  • Party details. This involves the names and addresses of every spouse entering the agreement. 
  • Shared and separate assets. Each spouse can specify the assets they opt to retain rights to ownership in case of a breakup. They call these assets separate property. Sure, the spouse can keep the assets if the relationship ends. However, a spouse needs to reimburse the other if there is an increase in asset value during their marriage. Any asset listed in the document as the shared property will be divided accordingly in case of a breakup. Of course, there will be exemptions if both spouses agree otherwise. 
  • Joint and separate debt. If a spouse has existing debts before the marriage, they can have the sole responsibility to repay the obligations in the prenup. Keeping debts separately can help avoid being a burden to each other with unpaid expenses. In some cases, when both parties have joint debts, you can specify how much each party is responsible for in case of divorce. In general, a joint debt is split evenly between parties. 
  • Children. A spouse can have dependents like children; they can include them in the document as the children, too, have their rights. Consequently, it will affect how the court will enforce the prenuptial agreement in the future. Interestingly, a prenup does not include terms on child custody, child support, or visitation for current and future children. 
  • Spousal support. Including spousal support or alimony in the prenup is optional. A few things to consider in determining payment support include the spouse who pays support to the other, specific payment amount, payment frequency, and payment methods. The court will determine the payment terms based on federal and state laws if you choose not to provide spousal support. 
  • Inheritance rights. With marriage, your other half is typically entitled to half of your estate. However, you can have the prenuptial agreement to limit the inheritance rights. This is especially useful when you decide to distribute a portion of your estate to another party like children, other family members, or charities. Some people choose to restrict a spouse's inheritance in different situations if they see the surviving spouse will be financially able even without the inheritance. 

How to formulate a prenup?

Every couple will have different approaches to making a prenuptial agreement. However, these are some essential considerations they must discuss along the process.

  • Discuss each party’s intentions. The first and probably the hardest to discuss in conversations is deciding to develop a prenuptial agreement. The situation can lead to a lack of trust or emotional fallout in some cases. As much as possible, both parties need to discuss the matter at the earliest phase possible. Attempting to discuss prenuptial agreement days or weeks before a wedding could be tagged as coercion.
  • Identify affordability and investment. Prenuptial agreements involve a considerable amount of money. Depending on the firm, some prenups can cost about $2 500. Yes, it can be expensive. However, all costs will depend on what state the couple belongs to and the complexity of property and assets. 
  • Seek legal counsel. Once the discussion is sorted out between parties, they can opt to seek legal counsel. Additionally, it could be beneficial for spouses to have separate attorneys to avoid any conflict of interest. In general, retaining legal counsel is not necessary to draft a prenuptial agreement. However, experts still advise it as courts can be speculative on documents created without any legal supervision. Spouses can also make a prenuptial agreement example and then have the lawyer authenticate the document. 
  • Create a list of all the financial assets. Once you decide on the legal counsel, both spouses need to list their assets. Both parties must declare all assets, including cash, debt, real estate, potential ligation funds, retirement accounts, and other financial information. 
  • Discuss and agree to terms. Additionally, spouses must also negotiate on specific topics, including the following. 
    • Estate planning
    • Alimony
    • Inheritance proceeds
    • Liabilities before marriage
    • Assets and money before marriage
    • Cheating penalties/ adultery
    • Other financial terms
  • Sign the agreement. After accomplishing the prenuptial agreement template, both spouses must sign the document. Additionally, there may be other requirements that need their signatures. It is advisable that the execution of the document must be completed thirty days before the wedding. 

Why get a prenup?

Gone are the days when prenups are only for the rich. Usually, these documents are used by couples wanting to protect their wealth. However, those of modest means also turn to prenuptial agreements for specific purposes. Here are a few of them. 

  • Clarify financial rights. Couples may simply like to clarify financial responsibilities and rights during their marriage with or without children. 
  • Get protection from possible debts. Once spouses use a prenup, they can specify in the document to take full responsibility for their respective obligations before marriage. This is essential for people who do not want to burden their partners after getting married. 
  • Prevent possible arguments in the event of divorce. The prenuptial agreement will also provide specifications on how the spouse should divide their properties and whether there will be alimony. As these are all being laid out in a legal document, it can prevent arguments if the relationship ends. 
  • Pass the separate property to children from your prior marriages. Couples with children from past marriages can lay out what they want for their properties when they die. This way, they can also peacefully allocate property for their children while still providing for each spouse. In the absence of the prenup, the surviving spouse might take ownership of a large portion of the spouse's property. This will lead to lesser pay for the children. 

The benefits

  • Protect what is important. In general, this legal document essentially functions to protect all the assets that matter to you. Several couples having significant assets and net worth turn to prenuptial agreements to better control who will receive what kind of asset in case of divorce.
  • Protections for your children. You can assure the protection of children with the prenuptial agreement. In case of a spouse’s death, the document allows children to be beneficiaries of particular assets. The same provision can also benefit kids from past marriages. 
  • Prevents the transfer of debts. Usually, the acquired debts during a marriage are divided when divorce happens. Meanwhile, those existing debts before the wedding will not be up for distribution. With a prenup, you can protect both parties from particular debts incurred for the duration of the relationship. 
  • Good for business. Those individuals with companies before entering marriage can use the prenuptial agreement. You can include business assets in the document, so if the marriage comes to an end, you can guarantee a better disposition of your business in the future. 
  • Reduces the cost of a divorce. Sure, prenups can be expensive. So is filing for divorce. However, with a prenup, it will cost you less money. Since the agreement lays out all the specifications of both parties, there will be less likely to have extended court proceedings. More prolonged proceedings mean more expenses to pay for lawyers. 

The drawbacks

  • Wonders whether the marriage will last. There might be some uncertainties surrounding the marriage with a prenuptial agreement. It could be that having that document means someone might not be sure that the relationship will last, as the marriage vows claim. 
  • It could ruin the romance. Several people believe that prenuptial agreements take away the romance between soon-to-be-wed couples and eventually damage the romantic side of their relationship. 
  • Can establish distrust. Having a prenuptial agreement is not an easy task, let alone deciding to convince both parties to come up with one. In some cases, spouses might not agree on dividing certain assets when divorce happens. Consequently, the disagreements might turn to feelings of mistrust. In the long run, these feelings might potentially derail the marriage. 
  • Some state laws can cover items in the prenuptial agreement. Sometimes, you may not need a prenup since the laws in your area already cover those present in the contract. Some states will detail how parties distribute the assets in case of divorce. To ensure you will not be wasting your money on prenups, confirm whether your state provides laws on the distribution of assets.
  • Prenups can’t include child custody and support. There are various factors affecting the court’s decision on the child’s welfare, including their needs and the child's best interest. Generally, child custody and support is another independent topic, and putting it in the agreement will not help decide the court’s decision for the child. 


Q1: Can involved parties modify the agreement after marriage?

A1: Yes. The same with both parties agreeing and signing to the prenuptial agreement, there should also be consent from both spouses to modify the agreement's contents. Suppose you look to amend the original contract; the process can be reasonably straightforward. The original document will have additional pages to the end of the prenuptial agreement. It will override or alter certain parts of the deal you wish to modify. If the other party does not consent to the amendments, you might want to look for alternatives. 

Q2: How does one draft a prenup?

A2: You can find a prenuptial agreement sample online to help create yours. Ensure to include all the necessary points mentioned in this article to ensure faster authentication from a lawyer and an easy filing afterward. 

Q3: Can you void a prenuptial agreement?

A3: In general, when involved parties execute the agreement accordingly, the prenup is a legally binding agreement. However, the court can rule the prenup is void if a party can prove that the document is illegal and unfair. Moreover, prenups are voidable in cases of:

  • Fraud
  • Failure to declare all assets
  • Concrete evidence of unfairness or duress
  • Involuntary signing 
  • Contents that are illegal or against the public policy
  • Contents perceive to be promoting separation or divorce

Q4: Is it possible to create a prenup without a lawyer?

A4: Yes. Hiring a lawyer is not a legal requirement in writing a prenuptial agreement. However, it can be beneficial to at least hire one. Lawyers can review the document to guarantee it adheres to your state’s requirements. 

Q5: Can couples get a prenup after marriage?

A5: No. It is called a prenup for a purpose since you need to accomplish it before marriage. However, a postnuptial document can be useful for parties after getting married. It divides assets similar to a prenup. Moreover, the document is also subject to similar legal requirements as the prenup.