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What Is a Prenuptial Agreement and Should I Have One?

Understanding when and how to get a prenup

A prenuptial agreement (or “prenup”) is a legal document that individuals create before getting married. Prenups are “intended to address issues between people who are about to get married in the event of their death or divorce, including financial issues, custodial issues and child support,” says New Jersey family law attorney Joseph P. Cadicina

Also called an “antenuptial agreement” or “premarital agreement” in some states, the prenup:  

  • Lists each spouse’s assets and debts 
  • Directs how property should be divided in the event of a divorce 
  • Specifies each spouse’s property rights in the marriage 

This article will give an overview of prenuptial agreements. Once you understand the basics of this legal document, it’s wise to speak with a lawyer in your area about the process for creating one. 

Two Misconceptions About Prenuptial Agreements 

First, let’s consider two common misconceptions about prenuptial agreements.  

Misconception 1: Prenups Are Only for the Wealthy 

One common misconception about prenuptial agreements is that they are only for the extremely wealthy.  

“If you own a lot of assets before your marriage, or you own a business, or you have family money, it’s always a good idea to prepare a prenup,” says Cadicina. However, a prenup can also be beneficial for individuals without substantial wealth.  

For example, “family law attorneys often see prenups when the parties have been married once or twice before, and they’re looking to protect their assets for the benefit of their children from a prior marriage or relationship,” says Cadicina.   

“In circumstances involving children from prior marriages, you want to make sure you have a prenup that addresses financial issues for your children and limits your exposure to your potential spouse.” 

Misconception 2: Prenups Mean the Relationship Isn’t Serious 

Another issue many people have with prenups is that they seem to predict the marriage ending in divorce. Raising the issue of a prenup before even getting married can feel awkward and tense.  

Nevertheless, it may be necessary from a practical perspective to do so. It’s important to realize that a prenup doesn’t mean you will get divorced or want to divorce in the future.  

Like other types of legal considerations, such as life insurance or estate plans, prenups prepare for the worst outcome. Divorce rates fluctuate but tend to hover near 50 percent. Depending on your financial situation, a prenup may be wise, even if it is uncomfortable to discuss at first. 

Issues Addressed in a Prenuptial Agreement 

Prenuptial agreements can address several issues that arise if a married couple chooses to divorce: 

  • How property will be divided between the married couple in the event of divorce 
  • Alimony 
  • Which property is considered separate for each spouse, including personal property and family assets 
  • Property for children from prior marriages 

Note that many states do not allow prenuptial agreements to settle child support and child custody issues. If a prenup does address these matters, its provisions will likely be found unenforceable and voided by a court in divorce or child custody proceedings. 

What types of property are included in a prenup? Any property the spouses own, including:  

  • Real estate 
  • Tangible property such as cars, jewelry, art, etc.  
  • Financial assets such as bank accounts and investments 
  • Intangible property, such as digital assets or intellectual property 

Is a Prenuptial Agreement Really Necessary? 

Do you even need a prenup?  

It can be helpful to think about prenuptial agreements by comparing them to estate plans.  

Through a will or other estate planning document, individuals can specify how they want to distribute their assets when they die. Estate planning gives individuals control over how their property is divided and who gets their property.  

That being said, estate planning is not absolutely necessary. Without an estate plan, state laws kick in to determine how property will be divided when an individual dies. In theory, an individual could leave their estate planning to state law.  

The problem is that state laws often do not track an individual’s preferences for dividing their estate. Plus, lacking a will can result in disputes and litigation among heirs. To make sure your wishes are followed, you need an estate plan. 

The same is true with prenuptial agreements. They are not absolutely necessary. If you don’t have a prenup, your state’s marital property and divorce laws will determine how property is divided between you and your spouse. State laws may handle matters to your satisfaction, depending on your situation and where you live.  

However, state laws may not track your preferences. For example, suppose you live in a community-property state such as Arizona, California, Texas, or Washington, where assets acquired in marriage are split 50/50 in divorce. But you would prefer that marital assets get distributed differently. A prenup can address this issue. 

Additionally, say one spouse brings a large amount of student loan or credit card debt into the marriage. The person with prior debt doesn’t want their future spouse to become responsible for any of that debt if they ever divorce or separate. “Prenups can specify what premarital debts will be divided [between spouses] or remain separate and apart,” says Cadicina. 

How Do I Make a Valid Prenuptial Agreement? 

Requirements for creating a valid prenuptial agreement vary by state. Generally, however, a prenup must meet the following criteria to be enforceable: 

  • It needs to be in writing and signed by both parties 
  • Its provisions are reviewed and agreed to by both parties 
  • The provisions are fair and equitable 
  • No coercion or deception was involved in getting a spouse to agree to its provisions 

Speaking with a lawyer about your prenup’s enforceability can ensure that the document is legally sound. 

“There are certain requirements that people need to understand about a prenuptial agreement,” says Cadicina.  

  • Legal representation. “It’s important that both sides have legal representation in a prenuptial agreement. You can’t have one attorney represent both parties. Each side should have its own separate representation.” 
  • Disclosure of assets and liabilities. “It’s also extremely important that the parties make a full and complete disclosure of all their assets, liabilities and income. It’s important that all assets are disclosed, along with any information that would support the valuation or income of the parties,” says Cadicina. 
  • Timing. Finally, “it’s essential that people complete their prenuptial agreement well before the date of the marriage.”  

Why are these requirements necessary? As Cadicina explains, “prenuptial agreements are often challenged. And the easiest areas for parties to challenge are that counsel did not represent them, that there was not a complete disclosure of assets, and that the agreement was done on the eve of the wedding so they didn’t have enough time to consider it and felt forced or coerced into signing.”  

In other words, these requirements are essential because they help avoid legal disputes in the future. 

When Should I Do the Prenup? 

How far in advance should you complete the prenup? “There’s no magic date,” says Cadicina, “but prenups do take a lot of time and effort to prepare, especially in the disclosure of assets and liabilities.” Given the complexity of preparing a prenup, starting several months before the wedding date would be recommended.  

It’s worth noting that if you don’t create a prenup before your wedding date, you may have the option of a postnuptial agreement (or “postnup”) in some states. A postnup is a legal contract similar to a prenup, except that it is created after the individuals are married. However, Cadicina says that, while “postnuptial agreements can be done, they are often unenforceable in New Jersey.” You should speak with an attorney to see if postnuptial agreements are enforceable in your state. 

Other Things to Keep in Mind When Creating a Prenup 

“Once you complete a prenuptial agreement, you need to keep in mind that you shouldn’t transfer assets inconsistent with the terms of the prenup,” says Cadicina.  

“For example, if you own a house before your marriage and the prenup says that if you get divorced, you keep the house, you can’t then, during the marriage, transfer the house title to both parties. By doing that, you’ve basically modified the terms of the prenup.” 

While “parties can make changes to a prenup, it’s strongly recommended that they do so in writing ahead of time so that there’s no confusion as to what was or was not done.”  

Do I Need a Lawyer to Create a Prenuptial Agreement? 

While it’s possible to create your own prenup without the help of a lawyer, getting a lawyer’s help is wise. 

State laws governing marital property and divorce vary. The legal requirements for creating a valid prenuptial agreement differ as well. The last thing you want to do is create an unenforceable prenup due to legal mistakes or omissions.  

An experienced family law attorney is an expert in your state’s legal requirements. A lawyer can ensure that your prenup is legally sound and that it addresses all the necessary issues. By getting legal help up front, you can avoid future legal problems and fees. 

It’s worth noting that, while prenuptial agreements and estate planning are interconnected, they are separate areas of law. “However, some estate planning lawyers will do prenups since they are familiar with the individuals’ assets involved,” says Cadicina. Additionally, “when it comes to complex prenups, lawyers will often involve the client’s accountant, since they are familiar with the income and liabilities of the client. That often helps when we’re preparing a prenup.” 

Questions for an Attorney 

Many family law attorneys provide free consultations for potential clients. 

Initial consultations allow you to get legal advice and consider whether you need legal help. To get the most out of a meeting, ask an attorney informed questions such as: 

  • What are your attorney’s fees and billing options? 
  • Do I need a prenuptial agreement? 
  • What are my state’s laws on marital property and divorce? 
  • What provisions should I include in the prenup? 
  • Can prenups be altered in the future? 
  • What is the process for creating a prenup? 

Once you have met with a lawyer and gotten your questions answered, you can begin an attorney-client relationship. 

You can look for a family law attorney in the Super Lawyers directory for legal help. 

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