Protect Your Future Together: Secure Your Partnership with a Prenuptial Agreement

What is a prenup in simple terms? A prenup agreement is a contract between a couple who plan on getting married. What does a prenup do? Through the prenup agreement, the couple agrees on who owns what when they get married and includes how everything will be divided in case of a divorce or separation. To elaborate a bit, a prenup: 

• assigns which properties are to be kept separate; 
• assigns which properties are to be considered marital property;  
• as a corollary of the above, assign which debts are to be kept separate and which ones are to be shared; and 
• assigns how property will be divided if the marriage ends.

Why do you need to use a Prenuptial Agreement? 

A prenup allows couples to decide how their property is allocated and will be divided in case they divorce. Without a prenup, state rules will determine which properties are separate or marital property as well as how marital property will be divided.  

To get a more concrete idea of why Prenuptial Agreements are important, here are a few reasons why you should use a prenup: 

1. To keep pre-marriage properties separate. This is especially important when there is a big difference in the parties’ wealth or properties going into the marriage. In some states, family use of separate property or mixing a spouse’s separate property with marital properties converts it into marital property. That means, it will no longer be that spouse’s separate property and will be divided among the 2 spouses, along with the other marital properties, in the event of a divorce.  
2. To keep earnings and properties acquired separately during the marriage separate. Without a prenuptial agreement, everything the spouses earn and acquire during the marriage will become part of marital property. That includes all salaries and all properties acquired using their respective salaries. Which means, a spouse can get half (or even more) of a property he or she had nothing to do with earning or building. This comes in handy when the parties to the marriage enter into it with a big disparity in income, current or projected.  
3. To decide how the marital property will be divided. Through the prenup, the couple gets to decide what goes into marital property as well as how it will be divided. Without one, the state default rules will apply. That means, depending on the state, a spouse who has made zero contribution to the marital property can get one-third or even half of it in the end. This comes in handy when one of the spouses makes considerably more money or contributes disproportionately more than the other.  
4. To protect a spouse who will be giving up a career to look after the household. This is one of the most overlooked uses of a prenup. It is not uncommon for a spouse, to stop working for the marriage. It may be to take care of the children, to move to another city or even a different country for the other spouse’s career or other reasons. Especially in equitable division states, sometimes the spouse who contributes less, money-wise, to the marital property gets less. Which can be unfair in this instance considering that the spouse who gave up his or her income did so for the benefit of the other. Having a prenuptial agreement allows the couple to address this and assign a better or fairer share to the non-earning spouse.  
5. To return the value of separate property invested into martial property. In some instances, a spouse goes into the marriage with a property, like a home which he or she contributes to the marital property. Also, there are instances where after marriage one or both spouses sell some part of their respective properties to buy a family home or some other marital property. In these cases, the separate property becomes marital property and the share of each may be very disproportionate. For example, where the wife sells her old home to contribute 90% of the cost of a family home while the husband contributes the remaining 10% and the family home is considered as marital property, the prenuptial agreement can specify, among other things, that each spouse’s share in the value of the family home when sold will be proportionate to what they contributed (90% and 10%). Without such provision, the husband is likely to get 50%-70% of the value.  
6. To keep debts separate.  In some unfortunate instances, one party’s liabilities prior to the marriage catches up with him or her and manages to take a chunk out of the marital property. With a prenup, the parties may be able to confine the respective liabilities to their respective separate properties only and prevent them from being shared debts.  
7. To assign the amount of support.  In many cases prenups offer an agreement for support or alimony between spouses. Support is awarded to the spouse who is unemployed, earns less, or whoever is not the “breadwinner” of the family. When done properly, the parties can set the amount of support or even waive the clause altogether.  
8. To avoid long drawn-out divorces. The prenup allows the couple to determine and settle difficult questions ahead of time, such as: -Property shares -Who owns what? -Who gets what? These issues are tough to answer under normal circumstances, imagine trying to resolve them when on opposite sides of a divorce suit. Using a prenup will save the parties a lot of back and forth regarding these questions and possibly make the divorce a bit easier to transition through.

When do you need to use a Prenuptial Agreement?

You need to use a prenup agreement when you are anticipating a marriage and you want to be able to decide or stipulate what happens to your properties, your future spouse’s properties and/or those that will be owned by both of you together.  

Are there any deadlines or times for when a Prenup is needed?

While there is no exact deadline, a Prenuptial Agreement, by definition, has to be done (signed, sealed, and delivered) before the wedding or marriage takes place. Other than that, you are free to execute the prenuptial agreement whenever you want.  

One point to remember, however, is that you need to make sure that: 

1. Both parties have enough time to read and evaluate the prenuptial agreement; 
2. They have enough time to have had an opportunity to consult with independent legal counsel; and 
3. That the prenup is not presented at a time so close to the wedding that a party may feel pressured to sign it. (For example if one party is presented with a prenup 3 days before the wedding, it may be believable that he or she only signed the prenup because he or she did not want to suffer the humiliation of having to cancel the wedding at that point.) 

Consider having at least a 30 day time window before the marriage to fill out the Prenuptial Agreement. Doing so diminishes the possibility of the prenup being questioned for having been signed under pressure or for the parties not having enough time to consider legal ramifications.

How does a Prenuptial Agreement work? 

A prenup works by laying out all the important property and financial questions (who owns what, who gets what and how will everything be divided) that a married couple may face if they get divorced or separate and having them answer those before the wedding. It’s effective for two reasons:  

Firstly, it requires the parties to come clean and give full disclosure of where they are financially. The parties are motivated to provide full disclosure by the fact that if they don’t, ether the prenup may get invalidated or the property they hid may become part of the marital property to be divided later on. Each party is required to disclose all that he or she owns (real estate, possessions, investments, and even money in the bank). They are also required to disclose their debts and other liabilities. This way, there will be no surprises later on.  

Secondly, both parties are coming to an agreement at potentially the best time in their relationship. The parties may come to an agreement that is much fairer, and possibly reach this point a lot less painfully than if they were to do it when they have filed for divorce. 

What are the main things that go on a Prenuptial Agreement? 

Prenups assign property and financial rights between a couple. They mainly contain the following terms: 

1. Definition of Separate Properties. This dictates which present and future properties are to be considered and kept separate. You can include a list of current properties as well as the types or categories of properties (including types of earnings and income that must be considered separate).  
2. Definition of Marital Properties. This defines which properties or what type of acquisitions or earnings will be considered part of marital property.  
3. Assignment of debts. This will determine which debts shall be kept separate and which ones will be joint.  
4. Disclosures of properties and liabilities. These pertain to the current properties and debts or liabilities of both parties. You can include them in the definition of separate properties and debts or use a schedule and annex them to the Prenuptial Agreement. Make sure that both parties make complete disclosures, otherwise the prenup may be invalidated by one party saying that he or she did know about some part of the other’s property or liability, which could have changed his or her mind about the prenup. This goes back to entering into the prenup with free and informed consent. Not disclosing an important part of a party’s properties or debts can in fact affect the other party’s decision.  
5. Determination of what happens to earnings during marriage. Default state rules vary on this, thus the parties would benefit from stipulating early on what will happen to their respective earnings. These can go into the marital property, or go into their respective properties.  
6. Manner of division of marital property. This is one of the most important provisions, if not the most important provision of the Prenup. With this provision, the parties can determine for themselves how their properties will be distributed in case of a divorce.  

Other provisions that you can add to the Prenuptial Agreement are:

1. Determination or waiver of spousal support 
2. Provisions on passing property upon the death of one of the parties 
3. Waiver of claim of breach of promise to marry 
4. Waiver of further disclosures 
5. Management of household expenses and spending 
6. Governing law and jurisdiction 

What should I NOT include in a Prenuptial Agreement? 

Remember that the Prenuptial Agreements only cover property and financial matters. This is not the place to put clauses on personal matters like assigning household chores or other personal obligations that are not financial. In fact, unless it’s some sort of employment or work contract, you can’t really legally bind someone to do those things for you. Here’s a list of a few things people try to put on their prenuptial agreements, but really shouldn’t. 

1. Assignment or schedule of who will do household chores 
2. Obligations to give or show affection 
3. Mutual promises to each other that are not financial or about property 
4. Child care obligations 
5. Child support and visitation rights 

Note that we included child support and the like. That’s because matters relating to custody and child support are never final. They are always subject to review by the courts because the things on which they are based are not constants. The parent’s income, fitness to be the custodian or even interest in being the custodian can always change. 

Although not always, adding these unnecessary (and effectively unenforceable) clauses might cause your prenup to be invalidated. For instance, the party contesting the prenup can say he or she only consented to the prenup agreement because of the clauses assigning the chores or because of the huge child support provisions. If this is true, then his or her consent was not technically valid. Anyways, there is very little to no chance that these clauses will hold up, so why risk that? It’s best to just skip them altogether. 

What are the most common mistakes to avoid when making a Prenuptial Agreement? 

1. Not having one. Almost anyone who gets married will benefit from having a prenuptial agreement. It’s not just for couples with a huge earning gap or for people with a lot of properties to protect. It settles everything in advance, so you don’t have to later on. It’s much easier this way.  
2. Having one but presenting it to the other party too close to the wedding. This pertains to consent that is freely given. The parties should sign this contract because they want to and not because they were pressured to go into it. The closer to the wedding, the higher the pressure (or at least the perceived pressure) to just go along with the prenup to save oneself from the embarrassment of having to cancel a wedding. It’s not always the case, but it is entirely plausible. This could be the basis for one party arguing that he or she signed the prenup under pressure.  
3. Having a one-sided prenup. Having a severely one-sided prenup can cause it to be invalid. It’s a given that unconscionable contracts are never enforceable. However, nobody knows at what point a contract becomes unconscionable right? We are only ever sure about the extremes. So, to be safe, make sure that your prenup is fair, that both parties are protected and that both will benefit. It does not have to be 100% equal, just make it so that neither party will have more incentive to stay in the marriage (to avoid the consequences of divorce) than the other.  
4. Not reading the prenup. This one is just as bad as not having a prenup. The whole point of having a prenup agreement is to decide on the things yourself. Also, you might find that you’ve agreed to giving up a huge part of your wealth. Read it through, and make sure you understand every single clause.  
5. Failure to make full disclosures.  Some people fail to disclose certain properties, some by accident and some on purpose. This does not help anyone in case of a prenup. This could cause the undisclosed property to be included in marital property (which is the opposite of what one would want) or, even worse, invalidate the prenup altogether, which could very well put him or her in a more vulnerable position than if he or she disclosed that property in the beginning. If it is important or valuable, disclose it.  
6. Including unnecessary terms. The value of the prenup is entirely dependent on whether or not it will be enforceable. So, it is best to, at all costs, avoid doing or adding things that will render it unenforceable, that includes including invalid and unnecessary terms.  
7. Having one signed under pressure. Some people think that having a signed prenup is the be-all and end-all. It is not. It’s not enough that the prenup is signed. It has to be freely and willingly signed. If one party can prove that his or her consent to the prenup is given under pressure, then the prenup becomes utterly unenforceable a.k.a. useless. Thus, make sure that both parties consent to the prenup willingly and eliminate all possibility of them signing it in under pressure or by mistake. Making full and complete disclosures and allowing time for the other party to review and seek independent legal advice are two very effective ways to do that.  

Do I need to use a lawyer, accountant or notary to help me?

While you don’t necessarily need a lawyer to draft your prenup agreement for you, it always helps to consult with one. In fact, having both parties each bring the prenup to independent lawyers for consultation helps in making sure that consent was given freely and intelligently. Note: if you do go and bring your prenup to a lawyer, you may want to ask for a Certificate of Independent Legal Advise concerning the prenup and attach it on there when you sign. 

No need to seek out an accountant for listing out your properties either if you can manage doing this on your own. But have the agreement notarized, also make sure you have two witnesses with you when you go to sign before the notary public.  

What is the easiest way to create a Prenuptial Agreement?

The easiest way to create a prenup agreement is by going through each important provision, checking for options, and agreeing on the same answers. If you do it this way, you are less likely to miss anything. Also, it would make the prenup fair, because both parties are able to decide what goes into the prenup rather than one party alone.  

Why use our Prenuptial Agreement Generator?

FormPros’ Prenuptial Agreement generator can be a useful tool for couples considering marriage for several reasons:

Clarity and Understanding: Creating a prenuptial agreement can often involve discussing sensitive topics related to finances, assets, and potential future scenarios. The generator helps facilitate these discussions by providing a structured format and guiding couples through the process of outlining their financial arrangements and expectations.

Customization: Every couple’s situation is unique, and the generator allows for customization based on the specific needs and circumstances of the individuals involved. Couples can tailor the agreement to address their particular assets, debts, income levels, and any other relevant factors.

Legal Compliance: Prenuptial agreements must adhere to certain legal requirements to be enforceable. FormPros’ generator can help ensure that the agreement meets the necessary legal standards and includes all essential elements, reducing the risk of it being invalidated in the event of a dispute.

Time and Cost Savings: Drafting a prenuptial agreement from scratch or hiring a lawyer to do so can be time-consuming and expensive. Using the generator can streamline the process and save couples both time and money, while still producing a comprehensive and legally sound document.

Protection and Peace of Mind: A well-drafted prenuptial agreement can provide both parties with clarity and protection in the event of divorce or other unforeseen circumstances. By clearly outlining how assets and debts will be divided, the agreement can help reduce conflict and uncertainty during what can already be a difficult time.

Professional Guidance: Even though the generator provides a template, it typically includes explanations and guidance to help users understand the implications of various provisions and make informed decisions. This can be especially valuable for couples who may not be familiar with legal terminology or concepts.

Overall, utilizing our Prenuptial Agreement generator at FormPros offers a convenient and accessible way for couples to create a customized and legally compliant prenuptial agreement, helping them navigate important financial considerations as they prepare for marriage.  

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