How Effective Are Prenups & Do I Need One?

A prenuptial agreement, or less commonly known as an “antenuptial agreement,” is any agreement made before marriage that specifies certain provisions in the event the marriage ends.

At a glance: Prenups are generally recommended for people who have acquired significant wealth and don’t want to risk losing it in a divorce. For example, a woman who inherited 500k from her father’s death and is now marrying a man who has a substantially low income. This soon to be bride doesn’t want to risk losing that inheritance that her father worked his entire life for, so she has her fiance sign a prenup before they get married specifying so.

Prenups aren’t recommended for young couples starting their lives together. I should rephrase – it’s not that prenups aren’t recommended it’s just that they’re kind of pointless in that scenario. You usually see prenups in second marriages or with people who have enough money to be concerned about losing.

Two young people who are just starting their careers, their marriage, their family… don’t really need prenups because they don’t have a lot of money and they don’t know how much they’ll make in their careers.

Legal at-a-glance: Are prenups legally valid? In Massachusetts, the short answer is yes. The longer answer I’ll phrase like this: Although prenups are valid, they are far from air-tight. Unlike a legal document like a will for example (which is difficult to contest if executed properly), prenups rely on situational considerations and are ultimately up to a judge to uphold. If a judge thinks a prenup is unfair, it will not be upheld. Contrast this to a will that is a legal document that doesn’t need to be fair. A judge still needs to enforce an unfair will as long as it had two witnesses and was written by someone of sound mind who was under no undue influence.

A prenup however, can be drafted an executed perfectly but still fail for essentially being unfair (see more for in depth analysis)

Do I need a prenup?

Do you have assets that you don’t want to risk losing in a marriage? If so, then consider a prenup.

What are the risks of a prenup?

Risk 1: your spouse may get pissed off at you for even suggesting it. Younger couples tend to get into tiffs over prenups because they believe the mere suggestion of having one implies that there is alack of love or trust in the marriage.

Adults who have been married before and who might’ve been burned on prior divorces recognize the importance of prenups and often times I see adults on their second or third marriages actually BOTH get prenups.

Risk 2: a prenup is not airtight. Your prenup may contemplate your wealth now, but as you’ll see, if circumstances change in a way that is unfair to the spouse, a judge might not enforce the prenup.

Legality and other considerations

To be valid at the time of its execution, a prenuptial agreement must comport with the rules governing the formation of all contracts, including the absence of fraud, misrepresentation, and duress, and must also satisfy fair disclosure rules, which require a judge to determine whether: (1) the agreement contains a fair and reasonable provision as measured at the time of its execution for the party contesting the agreement; (2) the contesting party was fully informed of the other party’s worth prior to the agreement’s execution, or had, or should have had, independent knowledge of the other party’s worth; and (3) a waiver by the contesting party is set forth.

Full and fair financial disclosures are a significant aspect of fair dealings between parties entering into a prenuptial agreement and an essential prerequisite for a meaningful waiver of marital rights. In a prenup, both parties MUST be aware of all of their marital rights. And, it is recommended both parties have their own lawyers.

Additionally, in considering whether a prenuptial agreement’s terms are substantively fair and reasonable, a court may properly consider such factors as the parties’ respective worth, ages, intelligence, literacy, and business acumen, and prior family ties or commitments.