What Is a Prenup, and Why You Probably Need One

In the song “Beautiful People”, Ed Sheeran sings, “In the world of beautiful people/Champagne and rolled-up notes/Prenups and broken homes/Surrounded but still alone.” Like the English singer, many believe that prenups are only for the ultra wealthy or people considering divorce—but that's not true.

Though it makes more sense to protect yourself when you have a lot to lose, a prenup can be beneficial for couples of all incomes. It not only protects personal assets but also determines how they'll to be divided in case of divorce and who is entitled to what in case of death. 

So, even if you intend to live the rest of your life with your future spouse, it might be a good idea to think things through and have your decision on paper before feelings of loss, grief, sadness, or anger come into play.

To help you decide if you should or shouldn't make a prenup, in this article, we tackle all the essentials: what is a prenup, what are the pros and cons, and the most common questions about prenuptial agreements.

What is a prenup agreement?

A prenuptial agreement, also known as a prenup or premarital agreement, is a contract between two people who are about to get married. It outlines how their assets and debt will be divided in case of divorce or death. “A prenup can also include provisions for spousal support and other financial arrangements,” says Joy Owenby, Founder and senior attorney of Owenby Law, P.A., based in Florida.

It goes beyond the division of property and wealth, also including the treatment of inheritance and rights to life insurance, for example. “Essentially, it's a way for both parties to protect their individual interests and ensure that financial matters are handled fairly and transparently in the event of a separation or divorce,” Owenby says.

Prenups can also overrule state laws in relation to the division of assets, property, liabilities, and responsibilities after divorce or death. “A well-crafted prenuptial agreement reached through financial transparency will generally be upheld across the jurisdictions,” says Allyson D. Burger, partner & family law attorney at Berkman Bottger Newman & Schein on Long Island, NY.

Who needs a prenup and why?

It's true that those with significant wealth are usually the ones who get prenups. However, even if you're far from being part of the top 1%, you might still need it. According to Burger, everybody should have one. 

“A prenuptial agreement is akin to an insurance policy. It can even provide a roadmap to how finances will be managed during the time of a couple’s marriage,” she says. “Anyone can benefit from having clarity in advance of entering into a financial partnership with their intended spouse, no matter their present financial circumstances.”

Business owners or individuals entering a marriage with children from previous relationships might also benefit from prenups. “A prenup can help protect substantial assets, ensure that business interests remain secure, and safeguard the inheritance rights of children from prior relationships,” Owenby says.

Since prenups also outline responsibilities over debt, if you or/and your partner are entering marriage with significant debts, a prenup can help “maintain fairness and prevent future disputes,” Owenby says.

Here are some extra reasons to consider getting a prenup, even if you're not rich:

• You have different income levels: If you make more than your partner or vice-versa, a prenup can help you protect your assets and also ensure a fair division of property acquired during the marriage, considering each one's contribution.

• You intend to be a stay-at-home parent: Leaving the workforce to take care of your children, especially as a woman, is a financial risk as it can be difficult to get back to work after a long break. In this case, a prenup is important to “outline financial support and property rights,” Owenby says, guaranteeing the parent staying home will be taken care of financially in case of separation.

• You expect a large inheritance or gift: If you know you'll be getting an inheritance, a significant amount of money, or an expensive family gift (such as a house), you may want to ensure that it remains yours and doesn't get mixed up with marital property.

• You are going to support your partner's career: It's common for couples to support each other's careers, either by providing for them financially while they go to school, paying off student loans and tuition, or investing in their business, for example. A prenup can establish a reimbursement plan—if needed or wanted.

If you don't fit in any of the above situations, prenups still can be useful to set clear expectations for the marriage. “Even couples without significant assets or debts may choose a prenup for the clarity and security it provides,” Owenby says, “ensuring that both parties have a clear understanding of their financial arrangements in the event of a separation or divorce.”

Other marital responsibilities that are often forgotten or discussed late in the relationship may also come up. For instance, are you going to have joint bank accounts? Who gets the pets in case of divorce (since they're considered property under divorce law)?

Prenup pros and cons

Like many written contracts, prenups come with some pros and cons. From Burger's perspective, the biggest benefit of a premarital agreement is the financial transparency necessary to draft the terms of the contract.

“Long gone are the days where women have to remain in the dark about financial matters, [since the] strength of a prenup largely depends upon both parties having engaged in full and fair disclosure of their respective financial conditions from the outset,” she says.

From Owenby's professional perspective, the prenup pros and cons, especially for women, include:

Pros

• Ensuring that each spouse’s assets will remain intact. If you have any material assets that you want to keep as separate property, a prenup can ensure that.

• Protecting the security of children from previous marriages. If you are going to blend families, a prenup can be part of your estate planning and protect your children's inheritance.

• Ensuring the continuity of business operations after a divorce. You may want to keep your business, especially if it is a family business, and a prenup can guarantee that.

• Defining what assets are marital or community property. In the same way that a prenup outlines what are individual assets, it also can define what is shared between the couple.

• Clarifying any special arrangements between the couple. For instance, some couples add an infidelity clause, imposing financial compensation to the betrayed partner. (However, such clauses may not be enforceable in every state.)

• Establishing ground rules for deciding future matters. A prenup can specify who takes on certain responsibilities or how to approach certain issues such as pet ownership, debt repayment, or household finances, for example.

Cons

• Perception of distrust: According to Owenby, prenups are often seen as “unromantic” and a sign of lack of trust, creating tension between partners. It can lead to couples giving up on the prenup altogether or entering marriage unsettled. “The process of negotiating a prenup can be emotionally challenging and may cause stress or strain in the relationship,” she says.

• Potential unfair terms: Not all prenups are balanced and there are cases where one partner is at a disadvantage. “Without proper legal guidance, a prenup might include unfair terms that favor one party over the other,” Owenby says, “potentially leaving the less financially stable partner at a disadvantage.”

• Changes in circumstances: Couples and attorneys can't predict what may or may not happen years or decades into marriages, and the terms of the prenup “might not adequately address future financial needs or lifestyle changes, requiring renegotiation or amendments,” she says.

• Legal challenges: In case of divorce or death, the court is not obliged to accept the terms of your prenup if it isn't properly written. “A poorly drafted prenup can be challenged in court, leading to potential invalidation of the agreement and unexpected legal battles,” she says.

What can't be included in a prenup?

Prenups can protect a variety of financial interests. However, there's a limit to it. When it comes to child support and custody, you can't determine any arrangement in a prenup. “These are determined based on the best interests of the child at the time of divorce,” Owenby says. 

Anything illegal or significantly unreasonable might not be enforceable as well. “Any terms that are deemed grossly unfair or unconscionable at the time of enforcement can be invalidated by a court,” she says. “Personal lifestyle preferences or choices, such as household chores or decisions about raising children, are typically not enforceable in a prenup.” 

That may also include the infidelity clause. According to Owenby, such a clause is a gray area in the U.S., because while some states recognize them, others might consider it “punitive” and nullify them.

“The enforceability of such clauses varies between jurisdictions. Courts will not enforce a provision that is at odds with public policy,” Burger says. “It’s best to consult with an attorney in your specific locale to learn what is and isn’t permissible where you reside.” 

What happens if there is no prenup?

In case of divorce without a prenup, you and your partner are subject to your state law. Unless you can come to an agreement by yourselves, a judge will determine your assets, debt, and property division. U.S. states typically follow one of these two division systems: equitable distribution or community property. 

Generally, if you live in an equitable distribution state, marital assets are divided fairly, but not necessarily equally. If you live in a community property state, marital property is going to be split equally with your partner. Justia, a website that focuses on US-based legal information, has a list of community property states. 

How to get a prenup?

While it's possible to draft a prenup by yourself, it's important to have an attorney helping you and your spouse outline its terms and ensure the agreement's enforceability. “Consulting with a family law attorney is highly recommended to navigate the complexities of family law and ensure the agreement meets legal standards,” Owenby says.

An attorney can also help you tailor the contract to your and your spouse's specific needs, finding a middle ground that's fair to both parties. According to Owenby, the process of creating a prenup commonly involves five steps: 

• Consultation with a family law attorney

• Disclosure of assets and debts

• Negotiation and drafting

• Review and signing

• Execution and notarization

As for fees, “the cost of creating a prenuptial agreement can vary depending on the complexity of the couple's financial situation, the attorneys' hourly rates, and the jurisdiction's legal requirements,” Owenby says.

Frequently asked questions

Do I need a prenup to protect my house?

Yes, if you want to protect a house or other property acquired before marriage, you should get a prenup. “A prenuptial agreement can protect various assets and financial interests, ensuring they remain separate property in the event of a divorce,” Owenby says.

Do you need a prenup if you have a trust?

Yes, you may still need a prenup if you have a trust, since one doesn't eliminate the need for the other. “A carefully crafted prenuptial agreement should set forth the treatment of any trust assets and trust income with specificity for protective purposes,” Burger says.

“Prenups and trusts can complement each other, providing comprehensive financial protection,” Owenby says.  “A prenup can specifically outline which assets are considered separate property, protect premarital assets, and provide clarity on spousal support and debt responsibilities—areas a trust does not cover.” 

What should a woman ask for in a prenup?

Every prenup is different and tailored to the couple's needs. However, there are specific aspects that women should consider outlining in a prenuptial agreement—especially the ones with a male partner. Besides the protection of premarital assets, division of marital property, and debt responsibility, Owenby highlights the importance of addressing the following terms:

• Protection of your inheritance (if you're receiving one from your family)

• Protection of your children's inheritance (in case you have children from a previous relationship)

• Terms for alimony, including the amount and duration of the payments

• Retirement benefits division which includes pensions, 401(k), and other retirement accounts

• Life policies to ensure your (and your children's) security in case your partner passes

• Terms for dispute resolution specifying how disputes regarding the prenup will be settled (mediation or arbitration)

“A prenuptial agreement should contemplate various women-specific issues including matters of spousal support, particularly if she is planning to leave the workforce to care for children,” Burger says. “It can even tackle matters of embryo storage and usage in the event of a divorce event.”

What happens if you sign a prenup and get divorced?

If you sign a prenup and get divorced, its terms will be upheld, as long as the document meets legal standards. There are circumstances where the law may overrule certain terms of the prenup. For instance, if it has terms deemed unfair (e.g. significantly favoring one spouse and leaving the other in financial distress). 

The court can also invalidate the prenup if it comes to light that one party was coerced to sign, if either party was dishonest about their financial situation, or if the prenup has illegal clauses. 

“Attempts to waive child support obligations or dictate custody arrangements may also be considered against public policy and therefore unenforceable,” Owenby says. “If circumstances have significantly changed since the signing of the prenup—such as one spouse becoming disabled or unable to support themselves—the court may adjust the terms of the agreement to ensure fairness.”

Does prenup mean no trust?

While some couples might view the suggestion of a prenup as a sign of distrust, it can have the opposite effect. “When approached with transparency and open communication, the process of drafting a prenuptial agreement can actually strengthen trust,” Owenby says. “It provides an opportunity for couples to discuss their financial expectations, responsibilities, and goals openly, fostering a deeper understanding of each other's perspectives.”

Do you need a lawyer for a prenup?

You don't necessarily have to hire a lawyer to draft your prenup, but it's highly recommended to have a family law attorney review it to ensure it meets your state laws standards, as well as making sure the terms are reasonable and fair for both parties. Otherwise, it might get invalidated in court. 

Does a prenup need to be notarized?

Yes, it does. “A prenup agreement must be signed by both parties in the presence of a notary public to be legally valid. Some states require witnesses as well,” Owenby says. According to Burger, the notarization is a major component that courts take into account when assessing a premarital agreement enforceability.

For more information, consult a family law or divorce attorney and check your state law regarding marriage, divorce, and prenups.