Congratulations, You’re Engaged…Is It Time for a Prenup?

“Love doesn’t make the world go round; love is what makes the ride worthwhile.”
— Elizabeth Barrett Browning

A prenuptial agreement specifies how assets, liabilities, and other financial matters will be handled in the event of divorce or death — and for many couples, especially those entering a second marriage or blending families, it can be a key step in avoiding stress and conflict later in life. Below is what to know about when a prenup makes sense, how to approach the conversation, and what makes an agreement legally binding.

Few moments are more joyful than finding the person with whom you want to spend your life. Engagement is a time to celebrate, but it can also raise important financial considerations, including whether a prenuptial agreement (prenup) makes sense.

While marriage is intended to be lifelong, divorce remains a common reality. Notably, “gray” divorce (couples over 50) is on the rise and now represents a significant percentage of all divorces. According to research from Bowling Green State University, 40% of all divorces in 2022 were gray divorces.

For individuals entering a marriage, particularly a second marriage or one involving children from a prior relationship, planning ahead can help avoid unnecessary stress and conflict later in life.

What Is a Prenuptial Agreement and What Does It Protect?
A prenup specifies the details of how assets, liabilities, and certain financial matters will be handled in the event of divorce or death. It can protect assets owned prior to the marriage, expected inheritances, and clarify future financial responsibilities. This is especially important in a second marriage and blended families or where one partner enters the marriage with significantly more assets or other financial obligations.

When Should I Start a Prenup Conversation?
Discussions surrounding finances and prenups can feel uncomfortable but delaying the conversation often creates unnecessary pressure and tension. Beginning the dialogue well ahead of time, optimally six to nine months before the wedding, allows sufficient time for thoughtful discussion and collaboration with legal and financial advisors.

How Should Couples Approach a Prenup Conversation?
The initial conversation should be private and low pressure. Transparency is essential. Both parties should fully understand the other’s financial situation and have the opportunity to express concerns and priorities. Each individual should also retain independent legal counsel to ensure their interests are fairly represented and fully understood.

How Long Does the Prenup Process Take?
Begin by finding an experienced attorney whom you trust and is an expert in family law and applicable state laws. Starting as early as possible is ideal because there will likely be multiple drafts and revisions. A well-structured process leads to a more balanced, durable, and effective agreement.

Are Prenups Legally Binding?
While each state has its own laws regarding prenups, they generally are based on similar criteria to determine whether a prenup is legally binding:

Full transparency – Both parties must disclose all financial information, including all assets and liabilities (financial and non-financial), income, expected inheritances, or expected future cash flow (e.g. from the sale of a business).

Fair and reasonable terms – The courts must deem that terms are fair. While this does not mean an equal split, the prenup must reflect the needs of both parties. For example, denying or providing minimal spousal or child support is likely to be considered unfair and could jeopardize the validity of the contract.

Mutual voluntary agreement – Both parties must enter the agreement freely. If the court believes one party was threatened, pressured, or coerced into signing, that could invalidate the prenup. This is a key reason to allow sufficient time for both parties to review and comment on the prenup.

Legal representation – Both parties should retain independent legal counsel to represent their interests and ensure a clear understanding of the terms and conditions of the prenup.

Klingenstein Fields Advisors is here to help you navigate the milestones in your life with expertise, guidance, and support. If you or a family member is planning a marriage, we encourage you to reach out to us at 212.492.7000 or info@klingenstein.com to discuss how it may impact your overall wealth planning. If you are not yet working with us, we invite you to reach out to us to learn more about Klingenstein Fields Advisors and our client-first fiduciary approach to wealth management.

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