What is a Marriage Prenup & How to Know If You Need One

Chances are, you’ve at least heard the term “marriage prenup,” but probably don’t know exactly what it is—or what it entails. For starters, a marriage prenup—better known as prenuptial agreement or premarital agreement—is an actual legal contract drafted prior to a couple’s wedding that sets forth exact terms and obligations regarding each person’s rights and marital property should the marriage end, explains Lauren Riesenfeld Esq of Lauren F. Riesenfeld Law, P.C. in Plainview, New York. The alternative to entering a prenup is that engaged couples abide by state laws to determine the distribution of any and all assets and liabilities, Riesenfeld goes on to explain. While this set of circumstances can work for some, other couples, especially those with large incomes and assets, may choose to have added protection in the form of a prenup agreement.

Although prenups can get a bad rap, they can actually be quite beneficial and provide peace of mind for couples. “When there are substantial separate assets acquired before the marriage, especially ones that the individual wants to control and benefit from during the marriage, a prenuptial agreement is typically recommended,” according to Bill Eddy, LCSW, Esq.Chief Innovation Officer and Co-Founder of the High Conflict Institute. “Also, if there are children from a prior marriage that a parent wants to assign assets and income to acquired during the new marriage, then a prenup will help with that.” 

 Who stands to benefit the most? To put it quite simply, Eddy explains that someone who is wealthy who is marrying someone with very little wealth will stand to benefit the most from having a prenup.  “For example, when a billionaire marries a young spouse who has not built up any assets, the billionaire may negotiate a prenup in which the spouse only receives $25 million in the event of a divorce,” he says.

 Deciding whether or not to enter a prenuptial agreement is a personal decision, notes Sabrina Shaheen Cronin, J.D., M.B.A., founder and managing partner of The Cronin Law Firm in Bloomfield Hills, Michigan. “Not only is every person’s perspective about prenups different, but every couple is unique and brings to the table their own set of circumstances, which may or may not warrant a prenup and which dictate the reasonableness of the terms of the prenup,” she says. “What is reasonable for a billionaire to pay his spouse in a negotiated alimony provision will be vastly different from someone earning a modest salary but wanting solely to preserve their business in a case of divorce.”

 If you’re on the fence about whether or not to get a prenup, here are some ways experts say you can tell if it might be right for you. 

You have assets you want to stay within your family.

If you have significant assets that you want to protect and ensure that they go to your children or stay within your family, Alisa Peskin-Shepherd, principal at Transitions Legal, a family law firm in Bloomfield Hills, Michigan, recommends drawing up a prenuptial agreement. “In the case of a second marriage, for example, or if one partner has a business or is part of a family business, these are good reasons to get a prenuptial agreement to protect those assets and make clear your spouse has no marital interest,” she adds.

There is a significant imbalance in financial situations.

If the two individuals in a soon-to-be marriage make considerably different amounts of money or if one has worked for decades while the other is just starting out their career, a prenup might be a good idea, according to Peskin-Shepherd. “If one partner has significant retirement assets and wants to protect those assets as separate property rights, or they have real estate and want to protect that, they might want to say up front, in the event of divorce or death, these assets are going to stay with me or my children or my family members, they’re going to be separate,” she says. If one partner has student loans or credit card debt, for example, the other might not want to be held responsible. “Even the growth in those accounts could be included in a prenup because usually the growth would be considered a marital asset.” 

You are concerned about your different spending habits.

If your partner is more frivolous with money than you are and it’s a bone of contention, a prenup may alleviate a lot of future arguments, notes Eddy. “Without a prenup, both spouses may be held liable for debts that only one has incurred no matter how outrageous,” he says. “This may avoid common arguments that one spouse keeps buying too many tools or the other spouse keeps buying too much expensive jewelry.”       

It’s worth noting that there are many issues that cannot be included in a prenup, such as child support or child custody provisions, non-financially relevant issues and anything that falls under the category of illegal, according to Cronin. “Additionally, there are many factors that may make a prenup invalid or unenforceable,” she says. “Remember, a prenup is a written contract, so the entire document or certain provisions of it can be challenged.” Your state’s laws will have a direct impact on what may or may not be enforceable should you have to use your prenuptial agreement. 

Riesenfeld also points out the importance of adhering to all of the rules associated with drafting and signing the prenup ahead of your wedding. “If someone is forced to sign a prenuptial agreement within 24 hours of their wedding, it is very likely that this person can assert the defense of ‘duress’ should the agreement go into effect,” she explains. As such, it’s important to rely on a the legal advice of a trustworthy family law attorney well in advance of your wedding day to take you through the process step by step.