Prenuptial Agreements: Who Needs It and How Do I Make One?
What you need to know if you're considering a prenuptial, or premarital agreement.
A prenuptial agreement ("prenup" for short) is a written contract created by two people before they are married. A prenup typically lists all of the property each person owns (as well as any debts) and specifies what each person's property rights will be after the marriage.
Who Needs a Prenup?
Contrary to popular opinion, prenups are not just for the rich. While prenups are often used to protect the assets of a wealthy fiancé, couples of more modest means are increasingly turning to them for their own purposes. Here are some reasons that some people want a prenup:
Pass separate property to children from prior marriages. A marrying couple with children from prior marriages may use a prenup to spell out what will happen to their property when they die, so that they can pass on separate property to their children and still provide for each other, if necessary. Without a prenup, a surviving spouse might have the right to claim a large portion of the other spouse's property, leaving much less for the kids.
Clarify financial rights. Couples with or without children, wealthy or not, may simply want to clarify their financial rights and responsibilities during marriage.
Avoid arguments in case of divorce. Or they may want to avoid potential arguments if they ever divorce, by specifying in advance how their property will be divided, and whether or not either spouse will receive alimony. (A few states won't allow a spouse to give up the right to alimony, however, and, in most others, a waiver of alimony will be scrutinized heavily and won't be enforced if the spouse who is giving up alimony didn't have a lawyer.)
Get protection from debts. Prenups can also be used to protect spouses from each other's debts, and they may address a multitude of other issues as well. (For more details, see Nolo's article Prenuptial Agreements -- What the Law Allows.)
If You Don't Make a Prenup
If you don't make a prenuptial agreement, your state's laws determine who owns the property that you acquire during your marriage, as well as what happens to that property at divorce or death. (Property acquired during your marriage is known as either marital or community property, depending on your state.) State law may even have a say in what happens to some of the property you owned before you were married.
Under the law, marriage is considered to be a contract between the marrying couple, and with that contract comes certain automatic property rights for each spouse. For example, in the absence of a prenup stating otherwise, a spouse usually has the right to:
- share ownership of property acquired during marriage, with the expectation that the property will be divided between the spouses in the event of a divorce or at death
- incur debts during marriage that the other spouse may have to pay for, and
- share in the management and control of any marital or community property, sometimes including the right to sell it or give it away.
If these laws -- called marital property, divorce, and probate laws -- aren't to your liking, it's time to think about a prenup, which in most cases lets you decide for yourselves how your property should be handled. (For more, see Nolo's article Is a Prenuptial Agreement Right For You?)
Making a Valid Prenup
As prenuptial agreements become more common, the law is becoming friendlier toward them. Traditionally, courts scrutinized prenups with a suspicious eye, because they almost always involved a waiver of legal and financial benefits by a less wealthy spouse and they were thought to encourage breakups.
As divorce and remarriage have become more prevalent, and with more equality between the sexes, courts and legislatures are increasingly willing to uphold premarital agreements. Today, every state permits them, although a prenup that is judged unfair or otherwise fails to meet state requirements will still be set aside.
However, because courts still look carefully at prenups, it is important that you negotiate and write up your agreement in a way that is clear, understandable, and legally sound. If you draft your own agreement, which we recommend, you'll want to have separate lawyers review it and at least briefly advise you about it -- otherwise a court is much more likely to question its validity. (For more information, see Nolo's article Prenuptial Agreement Lawyers: Do You Need One?)
How to Draft Your Own Prenup
Before you visit a lawyer, you can begin drafting your own prenuptial agreement.
Nolo's Prenuptial Agreements: How to Write a Fair & Lasting Contract, by Katherine E. Stoner and Shae Irving, shows you how to create a draft agreement yourselves, to bring to separate lawyers for review. It provides worksheets to help you and your fiancé determine what your prenup should cover and clauses for preparing an agreement that suits your needs, as well as lots of examples and samples to make your job easier.
The book can also be useful for same-sex couples in California, where domestic partnership gives partners many of the rights and responsibilities of marriage, and pre-partnership agreements serve the same purpose as a prenup. The downloadable eGuide Prenups for Partners: Essential Agreements for California Domestic Partners, by Katherine E. Stoner, explains how to use the book to create a valid pre-partnership agreement.
Prenups for same-sex couples are discussed in-depth in Making It Legal: A Guide to Same-Sex Marriage, Domestic Partnerships & Civil Unions, by Frederick Hertz with Emily Doskow (Nolo).