Prenup
Pre-nuptial agreements are written contracts signed before a marriage or civil union that govern property division and the splitting of financial assets in the event the couple divorces or one partner dies.
What is a prenup?
Though it’s commonly used to describe legal arrangements prior to the marriage of one or more wealthy individuals, prenuptial agreements actually take many forms and can be a useful planning tool for couples at every income level.
Prenuptial agreements—often shortened to just “prenups”—offer legal assurance that those assets will not be forfeited if the marriage ends in divorce.
Conversely, an individual might seek a prenup if their future spouse has significant debt or is planning to assume a large amount of debt in the future. Without a prenup, the responsibility for that debt could potentially be split evenly between both partners in the event of a divorce.
A prenup could also be used by couples in which financial responsibilities and household labor are shared asymmetrically. If, for instance, one future partner is planning to be a stay-at-home spouse or parent while the other partner is the primary income earner, a prenup could protect the partner with less income from being left with nothing in the event of a divorce. This is also the case in situations where one partner contributes more financially for a period of time while the other partner is undergoing advanced education or career development with the promise of higher wages in the future.
For a more complete understanding of how a prenup works and who might benefit from one, check out our comprehensive guide to prenuptial agreements.
Benefits of a prenup
A prenup is probably the last thing most couples want to discuss following a marriage proposal, but in many cases it can carry a number of benefits for both partners. Some of the perks of a prenup include:
- Financial peace of mind. Knowing your assets are accounted for in the event of a divorce or unexpected death can relieve stress about the potential for legal headaches down the road.
- Legal simplicity. A divorce or sudden death are challenging things to process without the complications of dividing assets. A prenup makes the process simpler and can often save couples a great deal of money in fees paid to both your spouse’s lawyer and your own lawyer while sorting out separate property from marital property or joint property.
FAQs
How much does a prenup cost?
Prenups can vary significantly in cost, depending primarily on the number and complexity of the assets involved and the legal counsel used to draft the agreement. Typically, a prenup will cost anywhere from $1,000 to $10,000 to complete. LegalZoom’s in-network attorneys can also provide you with advice.
Who should get a prenup?
There are no hard and fast rules when it comes to prenups, but certain individuals are more likely to benefit from one than others. Generally, people with a large amount of assets, a partner with large amounts of debt, a significant imbalance in financial responsibilities within their relationship, or children and pets from before the marriage are most likely to benefit from a prenup.
What makes a prenup valid?
A prenup must be voluntarily signed by both parties and both parties must provide complete financial disclosures when it is drafted prior to the marriage. Laws may vary from state to state, so it’s best to consult with a qualified legal adviser on what additional requirements your state might have.
What can a prenup cover?
A prenup is a great tool for wealth planning as well as general preparation for unexpected developments in your marriage. While it can often include financial terms covering everything from personal assets and savings to retirement benefits and pensions.