Let’s face it: Prenups get a bad rap. They’re often misunderstood, it’s super awkward to talk about them, and they’re often painted in a negative light in movies, gossip columns, and just about everywhere else. The truth is, prenups are more simple than you think, and can be a valuable tool in a healthy marriage. They’re also not reserved for only the ultra-wealthy! In fact, there are a lot of times where a prenup is necessary no matter the financials.
However, not everyone needs one! To help you understand everything there is to know about prenups, we spoke with attorney Jennifer Guimond-Quigley to find out what the legal agreement entails, who should consider one, and
What is a Prenuptial Agreement?
A prenuptial agreement is a contract created and signed by two separate parties that plan to marry. But what are the details that are typically put in it?
“The document outlines how assets, wealth and debt responsibilities will be split should the couple choose to divorce,” says Guimond-Quigley. “Each state has its own laws regarding the various nuances of a prenuptial agreement, but it is universally mandatory for each party to disclose all assets and wealth prior to signing to ensure both individuals are protected.” Failure to do so may void the prenuptial agreement.
Can Everyone Benefit from a Prenup?
Prenups are especially useful if you have children from a previous marriage, a family business or a business with partners, or other significant assets. But what if you don’t have complex financials, a house, or kids?
“It’s still beneficial even if there aren’t a lot of premarital assets, because what a prenuptial agreement does, in part, is create a very defined roadmap in case of a divorce,” says Guimond-Quigley. “Divorce judges, at least in Illinois, have a lot of equitable power, so they can do whatever they deem fair — which means there’s a huge question mark as to how a case will be resolved. [But] if nothing else, a prenup can definitely give a more clear picture and a roadmap and a defined path from A to B of how the divorce will go — how the property will be allocated, whether or not and to what extent maintenance will be paid, how debts will be allocated — so that everyone knows what to expect.”
Which State Do You Live? Prenups can also be beneficial if you live in a community property state, which are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Alaksa (which has an “opt-in” community property system). A community property state generally presumes that in a marriage, all assets (aside from gifts and inheritances) will be divided equally between the partners. The rest of the states are considered “Equitable Distribution” states, where a court presumes to divide assets in what it considers to be a “fair and equitable” way.
Who Doesn’t Need a Prenup?
While prenups can be helpful no matter where you live or your situation, not every couple needs one. For instance if you do not own your own business or have significant debt or assets coming into the marriage, you can choose not to get one and instead opt to rely on state law should you get divorced. You can also choose to keep separate funds/accounts which can help determine what’s considered “separate property,” but it’s not always concrete. Regardless, you’ll want to consult with a lawyer to make sure you are comfortable with your decision.
How Much Does a Prenup Cost?
“The cost is dependent on the complexity,” says Guimond-Quigley. “Most attorneys will charge an hourly rate multiplied by the time that is required to draft, negotiate and execute the agreement. I think parties need to understand that this is a document that’s going to last for [most likely] their lifetimes. It can afford couples huge protections for their assets and what they accumulated both prior to marriage and sometimes even also during marriage. It’s going to also streamline the divorce process, meaning that will eliminate and reduce attorneys fees for the divorce matter. [It is best to] talk to a few attorneys to get quotes on fees so you have an idea of what the rate might be.”
Do Both Parties Need Their Own Attorney?
When it comes to drafting a prenup, you’ll want to be represented by your own attorney. Otherwise, there’s an inherent conflict of interest. “In Illinois, there’s three basic rules that we follow to ensure validity of a prenuptial agreement,” says Guimond-Quigley. “First, both parties are adequately represented by separate counsel. Second, both parties fully disclose their assets, income and debts, and three. Third, the agreement is signed and negotiated well in advance of the wedding.”
Is There a Way for Couples to Make the Process Less Awkward? Should Only Attorneys Talk About the Terms?
“It really comes down to whether one party is asking for it and the other party’s opposed to it or begrudgingly agreeing to it — or both parties are highly motivated to have it done,” says Guimond-Quigley. “If you have both parties wanting it, I don’t think that there’s any real need to have the attorneys be the only ones communicating. Usually the parties will communicate with each other throughout the process; they’ll easily disclose all their assets and income, and there will be no issue with getting things done or communication.”
“If you have one party who’s reluctant to sign the agreement, that process looks a little different,” says Guimond-Quigley. “Perhaps maybe the attorneys for both parties are doing most of the communicating rather than the parties communicating amongst themselves. Sometimes, I’ll advise my clients to try to keep the communications about the prenup to a minimum, so it doesn’t feel as if they’re pressuring the other party throughout the process, or that they’re forcing something onto the other party.”
Bottom line? You don’t want one party to even have the slightest feeling that they’re being pressured or forced. “We want it to be a really fair process where everyone is feeling they’re getting all the time they need to review everything…without feeling like they’re in a pressure cooker.”
When Should You Start the Prenup Process?
“It just depends on the couple,” says Guimond-Quigley. “Some find it better to start the process early and have plenty of time; some have been talking about the terms between themselves and then they bring in the attorney before the wedding to put everything into writing and get it signed. Ultimately, I like to have the agreement fully executed at least several weeks before the wedding date so that the couple can focus on the rest of their wedding planning and not have to worry about a prenuptial agreement while trying to do all of the last-minute things that have to be done for the wedding.”
You have a couple choices when it comes to drafting a prenup. The most popular option is by contacting a local attorney. You can find one by searching for family law attorneys online, or get a referral from a friend or family member. Alternatively, you can draft a prenup using an online service like LegalZoom or HelloPrenup (remember them from Shark Tank?).
Since laws vary by state, it’s important to note that the best way to get more information about a prenuptial agreement is by consulting a local attorney. Regardless of how you personally feel about prenups, bring up the subject to your S.O. and have a worthwhile discussion. Then, make a decision together!
The information provided in this article is intended for informational purposes only and should not be construed as legal advice on any subject matter.
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