The Case for Prenups

It’s considered unromantic to propose a prenuptial agreement to the person you love and plan to marry. Who wants to think about divorce when they’re getting married? But the reality is that many marriages fail. And if yours ever does, a prenup may offer your best chance for preserving your assets. 

In prior eras, older couples on second or later marriages, often with children from a prior union whom they wanted to protect financially, were the ones most likely to get prenups. That’s still the case, but some younger couples, and couples of any age on their first marriage, are also signing the documents these days, says Arlene Dubin of Moses & Singer in New York. Dubin, a matrimonial lawyer, wrote the book Prenups for Lovers.

“You’re seeing a tremendous upswing in prenups over the last 20 years,” Dubin says. 

A fair prenup takes care of both spouses and recognizes each person’s contributions to married life, including working in a family business, entertaining, and raising children. While protecting certain assets at the time of the divorce is certainly a goal, “the less-moneyed spouse shouldn’t necessarily leave with nothing,” says attorney Jillian Gross of Aronson Mayefsky & Sloan in New York. 

Business owners, or their children, often seek prenups to protect their family company. “If it’s divided in a divorce, they may have to liquidate or borrow against the business, which is an unpalatable alternative,” Dubin says. Even if you don’t have a family business to shield, you may anticipate an inheritance that your parents or grandparents don’t want to end up in the hands of an ex-spouse or stepchildren who aren’t related, Dubin adds. 

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At issue is what you own before you marry, and what remains separate during the marriage. If one spouse is the beneficiary of a trust, it may be legally considered the person’s separate property, even without a prenup. But if that person receives distributions from the trust during the marriage, those payments might be deemed community property if they’re used to support the couple’s lifestyle, Gross says. Some states consider an inheritance to be marital property if it’s deposited into a joint bank account. 

For a prenup to be fair—and therefore enforceable—it should allocate something of value to both parties, Gross notes. “If you’re asking somebody to waive an interest in a business, or if you have all this separate property you’re bringing to the marriage, you offer them some kind of deal or payout in the event of a divorce,” she says.

Some things don’t belong in a prenup. For example, says Gross, a good matrimonial lawyer would avoid writing one with triggers that give one spouse a windfall if the marriage last for a certain period of time but little or nothing if it doesn’t. Also, any provision for children who are not yet born is unenforceable, she notes. If a divorce happens, you’ll have to deal with custody and child support then. 

Some attorneys draft prenups with lifestyle clauses—for example, requiring a spouse who has an affair to pay a certain amount to the other spouse or dictating who will manage household chores on which days. Stacy Phillips, a matrimonial lawyer at Blank Rome in Los Angeles, thinks these aren’t a good idea, however. 

You and your future spouse should each have your own lawyers. “It’s the best way to protect the enforceability of the prenup,” Dubin says. However, it’s OK if one member of a couple or that person’s family pays for both attorneys. 

“The better drafted and clearer the prenup, the more likely it is to be enforced,” says Phillips. If one spouse is hiding assets, or is forced to sign the prenup under duress, a court won’t uphold it. Even if both spouses agree that they don’t want support payments in the event of divorce, a court may require these payments if the judge thinks it is fair to do so, Phillips says. 

A prenup doesn’t guarantee there won’t be a messy divorce. One of Phillips’s clients, married for nearly two decades, had a child and two luxurious homes at the time she and her husband split. According to her prenup, she was entitled to $1 million and hefty spousal support payments from him for as long as he was alive. But after a lengthy marriage, that didn’t feel sufficient to her. 

“We went to court for life insurance, because otherwise, she would get nothing if he died,” Phillips recalls. 

Prenups aren’t for everyone. If a couple are young, with no business interests, there’s little need for a prenup, Phillips says. “If someone is straight out of school, with no assets, and wants a prenup, I would say, ‘Run, this person doesn’t have the generosity of spirit,’” she adds.

Sometimes circumstances change during the marriage, and the prenup’s arrangements no longer make sense. For instance, one spouse may have created a valuable business, or the spouse who had planned to stay home with the children may have instead embarked on a lucrative career. In such cases, it’s common for couples to amend the document or sign a new one, known as a postnup, Dubin says.

At some point in a good and long marriage, on the other hand, you may want to just tear up the original agreement.

How—and When—to Bring Up a Prenup

If you’re broaching the subject of a prenup with the person you’re planning to marry, says attorney Jillian Gross, it’s good to begin by explaining the reasoning behind your request.

If you need to, blame it on your relatives, she says: “It can be, ‘I love you, I want to spend the rest of my life with you, but my family has worked for generations to build this company.’” Other reasons would include parents’ insistence that a family business remain with blood relatives, or that the company not get caught up in court proceedings if there were a divorce. 

With a topic this sensitive, you may want to enlist a professional to moderate the discussion. “Sometimes it’s helpful if a financial adviser—someone neutral—suggests it,” says attorney Arlene Dubin. “Then it doesn’t feel personal.” 

One problem is that terms that might seem obvious to one member of a couple may not be as self-evident to the other. “There are also people who are just turned off by the word ‘prenup’ and need to be educated on why they aren’t all that bad,” Gross says. 

What’s crucial is raising the issue of a prenup early, Gross says: “If not before you’re engaged, then as soon as you’re engaged.” What you shouldn’t do is wait to discuss a prenup until just before the wedding. A court may later rule that one party was coerced because of the rushed timeline. And it’s no fun for the couple. 

“The worst ones are when you’re negotiating it while you’re having your hair done for the rehearsal dinner,” Gross says. —C.R.S.