Your Prenup Checklist

So you’ve decided that you need a premarital agreement (prenup).  Whether you plan to create your own prenup or hire an attorney to create one for you, this article will help you think about some of the specific areas that you can cover.  You may not cover all of the items I list.  However, it is good for you to be aware that the items are issues that you should address.

  1. Assets, liabilities, etc.

You should be prepared to list your assets, liabilities, income, and expectations of gifts and inheritances.

  1. Debts

You should be prepared to discuss the manner in which premarital and post-marital debts will be paid.

  1. Premarital Property at Death or Divorce

You should think about and discuss what will happen to your premarital property at death or divorce.  You should also consider the post-marriage appreciation in the value of your property.

Be sure that you have considered each type of property, whether that property is jointly owned or individually owned.

  1. Property Acquired After Marriage

You should discuss and agree upon what will happen, at death or divorce, to the property that is accumulated after the marriage.

  1. Determine the Status of Gifts

You should determine the status of gifts, inheritances, and trusts that each person receives before and during the marriage.

  1. Retirement Plans

You should be prepared to select the person who is to receive each retirement plan in the event of death and/or divorce.

  1. Support

Consider whether a party will receive spousal maintenance at divorce.  If yes, then determine the amount.  If you determine that spousal maintenance is contingent on some event, then determine what event qualifies.

  1. Death Benefits

You should discuss your death benefits in detail.  State what you will provide for in your will. You should also consider what role (e.g., executor) you want your spouse to play in administering your estate.

  1. Insurance

You should decide on the types of insurance coverage – medical, life, disability, etc. – you will have.

10. Identify Attorneys

You should identify the attorneys that will represent each party in the creation of the prenup.

11. Provide for Child Support and Custody

Some choose to discuss custody and child support matters.  However, agreements concerning the children may not be upheld by a court in a divorce, because the judge may determine that the agreement is not in the child’s best interest.

12. Applicable Law

You should decide what state’s law will apply to your agreement.  You should also decide what will happen in the event that you move to another state.

13.  Miscellaneous

Some people like to include clauses that describe their expectations.  For example, parties might want the agreement to say that the woman will agree to attempt to have or adopt children.  Or the parties might want the agreement to say that each spouse will provide a loving environment for the other spouse.  Some of these miscellaneous provisions may be unenforceable, but the parties choose to insert them because it helps them outline the emotional needs of the parties.

Is a Prenup Right for You?

There is a lot of debate about who should have a premarital agreement (a/k/a, “prenup”) and whether it is worth the trouble to ask a partner for one.  In the paragraphs that follow, I will discuss the factors that you should take into account when deciding whether a premarital agreement is right for you.

The Divorce Laws in Your State

The first question you should ask yourself when determining whether you should have a premarital agreement is this: Do I like way my property will be split if I divorce without a premarital agreement?  I recognize that this is a difficult question to ask because it forces you to think about the end of your relationship.  But the state that you live in has already set guidelines that a judge is likely to use in the event of a divorce.  Moreover, even if you live in a state that has divorce laws that you like, nothing stops your partner from moving to a state with different laws, establishing residence in that state, and then filing for divorce in that state.  If you do not like the divorce law in the state where you live, or you want to make sure that your spouse cannot file for divorce in a state with laws that you do not like, then the best way to protect yourself is to take control of your future through a premarital agreement.

Your Wealth Compared to Your Partner’s Wealth

If you are wealthier than your partner is, then you can use a premarital agreement to help ensure that your partner is marrying you for you – not your money.  On the other hand, if you are poorer than your partner is, then you can use a premarital agreement ensure that you are financially protected.

You Have an Ex-spouse or a Child from a Previous Relationship

For those who have been married and/or have children from a previous marriage or relationship, a marriage brings about legal and financial concerns are often very different from those that were involved in your first marriage.  For example, you may have support obligations.  You may also have a home or other significant assets.  A prenuptial agreement can ensure that when you pass away, your assets are distributed according to your wishes.

One of the Parties has a High Debt Load

If one of the parties has a significant debt load then a premarital agreement can help ensure that the “innocent spouse” does not have to take responsibility for payment the debt in the event of a divorce.

 You Own Part of a Business

If your marriage ends without you having a premarital agreement, then you spouse could end up owning a share of the income earned from your business.  Business partners and potential investors may be concerned about working with someone in your situation.  What’s more, you might be concerned about the prospect of sharing income, at divorce, with someone who married you after you had established your business.  A prenup can ensure that your income from your business remains your separate property.

How to Ask Your Partner for a Prenup

Nadia Goodman wrote an interesting article about how to ask your partner for a prenuptial agreement.  The article, written for, is available here:  Goodman quotes a lawyer, June Jacobson, who offers these five tips to help you discuss a prenup without messing up the marriage before it starts:

  1. Start the conversation early
  2. Decide the terms together
  3. Own up to what you want
  4. Listen to your partner’s concerns
  5. Leave room for change over time

In the paragraphs that follow, I will provide the lawyer’s tips, the author’s comments, and my opinion of those tips and comments.

  1. Start the conversation early. 
    Goodman says: “If you think you might want a prenup, bring it up with your partner during your initial post-engagement talks about what you want from the marriage.” Jacobson says: “Addressing the prenup early takes the time and emotional pressure out of it.”

I think Goodman and Jacobson offer good advice, but I think you should take it a step further.  I think you should get a feel for your partner’s position on prenups before the engagement.  In other words, do not ask your partner to marry you without knowing how your partner feels about signing a prenup.  By having the discussion early, you give yourself the opportunity to know your partner’s position when your emotional (and financial) investment is relatively low.  If your partner is not willing to sign a prenup, and a prenup is something you have determined that you must have, then you are able to walk away at the boyfriend/girlfriend stage, rather than at the fiancé stage.   Plus, as you get closer to your wedding date, you and your partner will be dealing with so many issues that you are not going to want to have to introduce the topic.

  1. Decide the terms together. 

Goodman says presenting a pre-drafted agreement to your partner is likely to “put [your partner] on the defensive.”  Goodman suggests that you hire a mediator and write the prenup collaboratively so you’re both on equal footing.  Goodman suggests hiring independent attorneys to review the finished draft. Jacobson says having independent counsel will increase the likelihood that the agreement will be upheld.

I think Goodman and Jacobson offer good advice here.  A good mediator can help the two of you reach an agreement that feels more like the product of a collaboration.  If you are the person who initiated the prenup talks, then it helps you (and the relationship) when your partner feels like a collaborator – rather than someone having something forced on him or her.

  1. Own up to what you want.

Goodman and Jacobson seem to say that you want to have an honest conversation about what it is that you want and why you want it. “You need to be willing to own it,” Jacobson says. “Don’t blame your lawyer or family to take the pressure off yourself.”  The idea, according to Goodman, is that the conversation will go better if your partner understands your reasoning.

I think this is very good advice.  When you are discussing what it is that you want, you should be sure to talk about your financial goals, your fears, and your interests.  Talking through those things is a great way to start the marriage.  Be sure that you think about and discuss every asset and liability that you have now and anticipate having in the future.  You might also consider discussing the way that you want other aspects of their marriage to work – e.g., whether one partner will stay home and raise the children while the other works.

  1. Listen to your partner’s concerns. 

Goodman and Jacobson say you should be sensitive to your partner’s concerns and creative about finding solutions that might be better for both of you.

I have found that mediation is useful in making sure that find solutions that are sensitive to both parties.  One of the more effective ways that mediators resolve cases is to use “interest-based mediation.”  This type of mediation focuses on the interests that drive the positions that the parties take.  The idea is that once the mediator understands  the interests, then the mediator can help the parties generate solutions that address the interests involved.  I use interest-based mediation when I mediate cases, and I am pleased with the results that I see.

  1. Leave room for change over time.

Goodman and Jacobson suggest that your prenup should leave room for change over time – e.g., increased involvement in a business, the decision to start a new company, or the decision that a partner should leave work to care for the children. “Think through all of these possibilities and create [an agreement] that is sensitive to various outcomes,” Jacobson says.

I think it is important to leave room for change.  Moreover, I think the process of considering multiple scenarios gives you an opportunity to think about matters that you may not have considered. So I have no problems with the advice that Goodman and Jacobson provide.

In conclusion, Goodman and Jacobson provide some great tips for anyone thinking about asking for prenup. By following suggestions provided above, you can make asking for a prenup as stress free as possible.