Prenuptial Agreement Benefits and Drawbacks

Here's a quick glance at the pros and cons of premarital agreements.

A prenuptial agreement—which is a legally binding contract that determines how spouses will divide assets and debts in the event of a divorce—isn't just for the wealthy, or those with many assets. More couples are using prenups now than ever before.

If you're curious about whether a prenup is right for you, or if you're considering signing your fiance's proposed prenup, it's helpful to consider the pros and cons of a premarital agreement.

What Are the Benefits to a Prenuptial Agreement?

Here are some of the most common benefits of creating (or discussing) a prenuptial agreement.


Considering a prenup is one of the best ways to open a line of dialogue in your relationship. Talking about a prenup may seem daunting or even scary, but being open and honest about property, finances, and each of your expectations before the wedding may be one of the most beneficial aspects of the process. Even if you and your spouse talk about the contract and never draft it, you're starting your marriage off with an open line of communication and a level of trust that can keep your relationship afloat for many years.

Save Time and Money

Divorce is expensive and time-consuming. Even if you and your spouse agree on every legal issue that plagues a typical divorce, you may still end up spending hundreds or even thousands of dollars in court costs and possible legal fees before a judge formally terminates your marriage. Many couples begin the divorce process on the same page, but as time passes, spouses tend to disagree on significant issues, which costs more and takes additional time.

A properly drafted prenup allows the couple to address the most common legal hurdles in divorce, which can bring a quick resolution to the process and avoid a lengthy court battle.

Protect Your Separate Property and Family Heirlooms

One of the most contentious areas of divorce is when it's time to divide assets and debts. We often like to think "what's mine is yours and what's yours is mine" as the marriage motto, but when it comes to divorce, most couples disagree on who should walk away with specific property.

A divorce judge's first take is usually to identify and categorize the couple's property as separate or marital and then divide it. A prenup can be especially helpful if you enter the marriage with family heirlooms or other property that you wish to keep separate. Couples can specify what property belongs to each spouse and how they'd like to handle distribution of the assets if they divorce later.

Define What Qualifies as Marital Property

If you divorce, the court will split marital property between the spouses according to your state's laws. In community property states, courts presume that every asset acquired during the marriage belongs equally to both spouses, and the judge will divide the value evenly between them. In equitable distribution states, judges evaluate who the marital property belongs to and then divide it fairly between the spouses.

A prenup can help couples avoid a bitter and lengthy property battle by defining what qualifies as marital property and how you'd like to divide it in the divorce. Some couples believe that a 50/50 split would be best, but for others, an unequal distribution may be more appropriate. One of the most beneficial aspects of a prenup is that you and your spouse can decide how you'd handle it and the court will respect your wishes.

Protect Yourself from Debt

Along with accumulated assets, the court will split marital debt and other liabilities in the divorce. If your spouse comes to the marriage with an extensive amount of credit card or other loan debt, a prenup will allow you to define the liabilities as your spouse's separate debt and detail how you will handle it in a divorce.

What Are the Drawbacks to a Prenuptial Agreement?

Although there are many advantages to drafting a prenup, it's important for you to understand the potential drawbacks before you agree to sign the contract.

It's a Romance Killer

Let's face it; a prenup is not romantic. Proposals and thoughts of a fairytale ending often bring up images of romantic dinners, hand holding, and walks under the stars. There's no better way to kill that vibe than by bringing up the potential for a future divorce. Although marriage is a partnership that goes beyond romance and includes serious issues such as property and finances, for some couples, discussing these matters might put a blemish on this exciting time.

Be sure to carefully consider the right time and place to discuss a prenup, and don't wait until the wedding invitations have already gone out to bring it up. Not only is that unfair to your future spouse, in many states, if you spring a prenup agreement on your fiancé just before the wedding, and it's signed under pressure, a court may find the contract to be invalid, because your spouse didn't have sufficient time to carefully consider the terms.

It Might Be Unnecessary

In most states, divorce laws may already accomplish your goals for property division. For example, if you live in a community property state, the judge will equally divide all the property that you and your spouse acquired during the marriage. If you don't desire more than a 50/50 share of the marital property, a prenup is probably unnecessary. Just make sure you speak with an experienced family law attorney, so you understand your state's laws before you tie the knot.

There are also some matters that you can't resolve in a prenup, like child custody, parenting time, and child support. If you're not concerned about how the court will divide property or debt, and your only worry is who the judge will designate as the custodial parent to your future children, a prenup is unnecessary. Courts retain authority to decide custody and child support—you cannot predetermine these issues in a contract.

It Can Be Unbalanced

It's easy to have tunnel vision when you are first in a relationship. Many parties sign a prenuptial agreement thinking "I'll never get a divorce, so what does it matter?" It matters because if you sign a prenup that favors your spouse, you may walk away from the divorce with less than what you deserve. The key to making sure that your prenup favors each of you equally is for both of you to hire independent attorneys to draft and review the document before you sign it.

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