Should I Get a Prenup? – What You Need to Know

Questions like "Should I get a prenup?" usually don't cross your mind when you're thinking about getting married, but it's something that needs to be considered.

By Sarah J. Jacobs, Family Law Attorney

When two people agree to marry and build a life together, they usually spend a significant amount of time planning. They plan for their wedding, their honeymoon, the family they hope to have someday, and the home they want to create. 

Couples just starting out in this romantic way aren’t usually talking about a plan for divorce. But things change, and life can throw unexpected curveballs your way. Marriages can end for any number of reasons, and it’s important to prepare for the possibility.

Experts — both legal and financial — recommend that any couple entering into a binding legal agreement (which marriage is) also craft a prenuptial agreement as a way to protect both themselves, their future spouses, and potentially, their future children

Prenuptial agreements often have a bad reputation. But in reality, they’re a way to carefully plan for whatever the future holds, at a time when both parties want the best for each other. Contrary to popular belief, prenups aren’t just for divorce—they can also be critical for protecting the interest of both parties in a number of situations. 

Let’s talk about some common reasons people consider prenuptial agreements — and whether they might apply to you.

What Is a Prenuptial Agreement?

A prenuptial agreement, or “prenup,” is a written contract in which a couple agrees to their marital rights and responsibilities as it relates to assets, debts and financial issues, in the event of a divorce or death.

If you’re not thinking about divorce, you don’t necessarily realize that the default rules of many states — and is the case in New Jersey — are that the marital assets and liabilities of a couple are distributable. The state defines what marital assets and liabilities are. Marriage is a legal agreement, and the state has its own definitions for how to dissolve that contract. Each state has specific terms and conditions, so it’s important to read the fine print before you sign on the dotted line. 

That said, state laws are broad strokes that are meant to address the needs of a general population. Every marriage is different, and every couple has specific interests to protect when they enter into marriage. A prenup is the best way to tailor your marriage contract to your family’s unique factual situation. 

It’s also the best way to simplify the divorce process if one occurs.

Divorce can be an emotional, expensive, and lengthy process, especially if it requires litigation. If it’s crafted well and negotiated correctly, a prenup can often reduce stress and costs in the long run and eliminate many of the challenges associated with dividing assets, debts, or a family business.

What Does a Prenup Protect?

A prenuptial agreement generally determines any factors related to finances and marital assets. Prenups are highly customizable and can include:

  • Real estate acquired before or during the marriage
  • Retirement funds
  • Alimony in the event of a divorce
  • Expected inheritances
  • Spousal debt
  • Payout for any life insurance policies
  • How income is defined
  • Businesses started before the marriage but which will be operated after the marriage

For a prenuptial agreement to be enforced in the courts, it must be fair to both parties. A court will not enforce a prenup that appears one-sided, deceptive, exploitative, or drafted by one lawyer acting on behalf of both parties. Each party must have a separate legal representative to ensure a fair process for everyone.

A prenuptial agreement is only used for financial decisions. A prenup does not cover:

  • Child custody or visitation time
  • Child support 
  • Stipulations that are not financial, such as appearance, clothing choice, household responsibilities, etc.

Four Reasons a Prenup May Be Right for You

As a general rule, prenuptial agreements are always a smart move when it comes to protecting the interests of you and your spouse. 

That said, there are a few situations in which a prenup is particularly advisable: 

1. You have children from a previous marriage

A prenuptial agreement is an important step in protecting the financial interests of any children from a previous marriage, especially if you are receiving support on their behalf or you have obligations under a prior divorce agreement that could be affected by your remarriage. Prenups can provide security for children and allow parties to create a trust or will in the event of a parent’s death. 

2. You own a business

If you own a business before you get married, a prenuptial agreement is essential.

A prenuptial agreement can protect other parties involved in the business and ensure that a party has full discretion over managing their business and how earnings from the business are defined. This can be especially important if a business’ value changes throughout a marriage or if the party’s income structure within the business changes. A prenup can also prevent expensive and time-consuming litigation relating to the business, no matter what either party contributed during the marriage. 

3. One spouse has more wealth or debt

Whether you bring substantial wealth to your marriage or your spouse has incurred sizable debt, a prenup can help protect your finances in the event of a divorce. 

If you aren’t wealthy at the time of marriage, a prenup protects you by laying the groundwork for any future wealth division. For instance, without a prenuptial agreement, a creditor could collect on a debt from one spouse through joint assets. A fair, balanced legal agreement may help prevent one spouse’s debt from negatively impacting the other. 

4. You want to protect yourself

In addition to financial decisions, prenups can also protect each spouse’s right to privacy. Such agreements can include confidentiality clauses that protect both parties. For example, a prenup could include an agreement to resolve disputes through arbitration or mediation, rather than the courts, which would make any dispute public record. It could also extend to releasing a spouse’s information on social media.

It’s important to only agree to a prenuptial agreement that you feel comfortable with and have fully thought through. Your prenuptial agreement may be considered void if: 

  • The paperwork was not completed properly 
  • There wasn’t full disclosure of assets and liabilities by both parties before each signed
  • The agreement was deceptive or signed under duress 
  • The agreement is either incredibly unfair or overly fair to one of the parties, or there is a clause of the agreement which could be viewed as illegal or unconscionable
  • Either party was under the influence of alcohol or drugs or lacked the mental capacity to consent   

An experienced family law attorney can help you navigate a prenup and arrive at a solution that works for both parties.

At the end of the day, prenups are about financially protecting both parties in a relationship. It’s much easier to make decisions before partners are embroiled in messy, complicated disputes. What’s more, it may be a good opportunity to pause and reflect on the issue of finances for you and your partner. A prenup can highlight questions that need to be resolved before moving forward with marriage. 

What’s the Difference Between a Prenup and a Postnup?

While a prenup is drafted before marriage, a postnup is signed after the wedding/marriage ceremony. Couples often create a postnup when they experience a significant lifestyle change, such as an unexpected inheritance, the birth of a child, or if one spouse decides to start a business. They also may create a postnup when they wanted to sign a prenuptial agreement, but either there wasn’t enough time before their marriage or their assets and liabilities weren’t fully disclosed.

A postnup can also act as an addendum to a prenup and if negotiated and crafted carefully, they can be a worthwhile measure for any couple seeking to prevent costly and/or messy divorce proceedings down the road.

The Importance of the Prenup Conversation

While prenups can often have a negative connotation, they’re a good opportunity for couples to sit down, communicate, and plan out their financial future together. The process can lead to productive conversations that clarify your hopes and expectations for a long and happy marriage. Since communication and finances are often the root cause of divorce, putting a prenuptial agreement in place prior to marriage can help avoid potential issues.

Throughout the prenup conversation, each party should work with their own attorney, preferably one experienced in family and divorce law. Trusted legal counsel can provide sound advice and ensure that both spouses are protected through a fair agreement that accounts for a variety of circumstances.

Matrimonial Law Attorney and mediator Sarah Jacobs is the co-founder of Jacobs Berger, a family law firm in Morristown, New Jersey. Sarah has been representing and protecting the rights of her clients for nearly twenty years and is dedicated to providing dynamic and personalized legal solutions. The attorneys at Jacobs Berger work find solutions that benefit divorcing families and de-stress the divorce process.