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Prenuptial agreements in the US demystified PART 1: Meaning, Significance and Need

Prenuptial agreements, also known as antenuptial agreements or premarital agreements, are written contracts signed by a couple before they get married. These agreements give the couple control over many of the legal rights they will receive upon marriage and what will happen if their marriage ends in divorce or death. Prenuptial and postnuptial agreements are identical, with the exception that the latter is signed after a couple is married.

Postnuptial agreements are often known as separation agreements when a divorce is on the horizon. In order to replace many of the de facto marital laws that would normally relate to an event of divorce, such as the laws governing the division of property and assets, couples enter into a written prenuptial agreement with predetermined terms that give clarity and define their marital rights. Waivers of a surviving spouse's entitlement to obtain an elective portion of the estate of the deceased spouse are sometimes included in prenuptial agreements.

Meaning of prenuptial agreement
Prenuptial agreements, commonly referred to as "prenups," are typical legal actions performed before marriage. A contract formed after marriage is referred to as a "postnuptial agreement," whereas a prenuptial agreement is known as an "antenuptial agreement" in some areas. An "antenuptial agreement" is another name for a prenuptial contract. An agreement signed after marriage, as opposed to before, is known as a "postnuptial," "postmarital," or "marital" agreement. Sometimes the term "contract" is used for "agreement," as in "prenuptial contract."

A prenuptial agreement is a sort of contract that two individuals make before getting married. Each party's obligations and property rights for the length of the marriage might be specified in this contract. Prenuptial agreements are more frequently used to spell out the rules for splitting up financial obligations and assets in the event of a divorce.

In the case of a divorce, a prenuptial agreement specifies each spouse's property rights and financial obligations. So, even though nobody plans to divorce when they tie the knot, over half of all marriages in America result in divorce proceedings. Therefore, it's usually wise to at least give a prenuptial agreement some thought. Prenuptial agreements are frequently used to safeguard the assets of rich couples, but they may also protect family businesses and perform other crucial tasks.

Prenuptial agreements have historically been a contentious subject for marriages. Prenuptial agreements are portrayed in the media as tools used by celebrities and other high-net-worth individuals (HNIs) to limit the amount of money that their prior spouses can demand upon separation. However, a prenuptial agreement may be a legitimate method of allocating assets and obligations when it is well drafted and used.

The growing trends of prenuptial agreements in the US
Prenuptial agreements have steadily increased in recent years, according to mediation specialists. Prenuptial agreements have typically been demanded mostly by males, but recent studies have revealed a sharp increase in the percentage of women who wish to make the first move. According to one survey[1], up to 44% of unmarried people nowadays think it's important to sign a prenuptial agreement prior to getting married. 15% of those whose marriages ended in divorce regret not having a prenuptial agreement in place.

Marriage is becoming more of a late-arriving phenomenon among millennials. According to the US Census[2], the median age at which men and women got married increased after 2005, going from 27 to 29.9 for males and 25.5 to 28.1 for women. According to research by Bridebook[3], the typical couple waits 4.9 years to marry each other. There is a greater need for financial autonomy and security among millennials and a greater understanding of marriage as not a social contract but a legal contract.

This delay in marriage is a major factor contributing to the increase in prenuptial agreements. Many millennials are saddled with student loan debt from their higher education, often with staggering levels by the time they graduate. Premarital agreements may possibly be becoming more common as a result of the millennial generation's rising student loan debt. Because millennials are getting married later in life, they have had more time to rack up debt (school loans, mortgages, vehicle loans, etc.), and life only gets more difficult as we get older. A prenuptial agreement can shield the debt-free partner from the debt of the other spouse in the event of divorce if one spouse has much more debt compared to the other.

Furthermore, according to a 2016 survey by the American Academy of Matrimonial Lawyers (AAML)[4], more clients have been seeking prenuptial agreements before getting married in recent years. The millennial generation in particular has expressed a strong interest in protecting the increase in the value of separate property, inheritances, and community property division. It conducted a poll of attorneys, and just over half of them mentioned a rise in the demand for prenuptial agreements among millennials. Among people aged 18 to 34, a decline of only 2% was seen.

Prenuptial agreements have grown fivefold over the previous 20 years, according to Arlene Dubin, chair of Moses & Singer's New York office's marital and family law practice. According to a TD Ameritrade study of 1,000 Americans ages 18 and older, over one-third of millennials said they were delaying getting married and 38% said they were delaying having children due to their financial commitments.[5] According to a second poll conducted by Wakefield Research for Graebel, a business relocation firm, millennials are also consciously deciding to make such large sacrifices for job progress.[6] According to Wakefield Research, about 71% of people would be ready to put off getting married and 72% would be ready to put off starting a family.

Many ways in which millennials differ from other generations include their more cautious, and frequently pragmatic, approach to going into a marriage. Whatever the reason for the surge in millennial interest in prenuptial agreements, it seems probable that the paradigm change in support of prenups will have an impact on future generations. Although the prenup wedding fad that millennials started isn't exactly exciting, sensual, or romantic, it is unquestionably progressive.

Circumstances establishing the relevancy of prenuptial agreements
One may have given prenuptial agreements some attention if one is getting married. Prenuptial agreements appear like unromantic papers that prepare for divorce, which is why many individuals are against the concept. Actually, this idea is a really fresh, contemporary interpretation of prenuptial agreements. Prenuptial agreements, often known as marriage contracts, are essential legal instruments that have existed for many years.
  1. Parents and property:
    Prenuptial contracts have existed since ancient Egypt.[7] In actuality, one of the oldest prenuptial agreements is more than 2,000 years old. Prenuptial agreements did not then exist as legal instruments that outlined the rights of each spouse. Instead, they were agreements, verbal or written, that set forth the assets that each spouse would bring to the union. They served as a basis for determining the bride's dowry and bridewealth, or the sum of money the groom would offer the bride's family in return for the bride's hand in marriage.

    The parents of the bride and groom, and seldom the happy couple themselves, negotiated these arrangements. Even while the idea of their future in-laws picking their partner and negotiating a price for their hand in marriage makes modern-day couples shudder, it was a widespread practice up until the early 20th century.

  2. Rise of women's rights:
    Women were denied the ability to own property for many centuries. They frequently were unable to select their own partners. Prenuptial agreements evolved over time as a mechanism to guarantee that a woman would have access to her husband's assets in the event of his passing.

    This initially appeared in a ketubah, an ancient Hebrew marriage contract, which was written 2,000 years ago. Prenuptial agreements became more common for this reason when New York State approved the Married Women's Property Act in 1848[8], which made it clear that married women would inherit their husbands' estates.
  3. Prenups in today's time:
    Prenuptial agreements are now legally binding documents that specify how property will be divided in the case of a divorce. Prenups can protect women's finances in divorce, but their primary goal is to safeguard the objectives of both spouses. Prenuptial agreements are increasingly regarded by the law as essential records for a just distribution of assets.

Working of prenuptial agreements
Prenuptial agreements are governed by state law, but according to the American Bar Association, all demand that these contracts be "fair" in both their formal and substantive requirements. Understanding fundamental concepts of contract law, such as competency, coercion, fraud, and undue influence is necessary to assess if an agreement is fair.

Prenuptial agreements are often started by wealthy spouses to preserve property, although the reasons for doing so vary. Older couples may also desire such a contract because they may have possessions or retirement income that they want to safeguard and maintain, and they may also want to ensure that their children from previous marriages receive a portion of their fortune.

Couples may disagree over prenups, particularly if one partner is significantly wealthier than the other. Prenuptial agreements may end up in court when a marriage ends. A court is generally be consulted to determine if the agreement was fair and uncoerced. Prenups that are sprung on a spouse on or close to the wedding day are often not well received by the courts.

A prenuptial agreement typically comprises a database of each partner's assets, some acknowledgment of which assets will persist in each spouse's property in the case of a divorce, parameters for how marital property will be distributed in the case of a divorce, language regarding responsibility for debts incurred both prior to and during the marriage, and some overview of spousal support, such as alimony.

It's debatable if a prenuptial agreement facilitates a speedier or simpler divorce. Long and expensive litigation may begin if one spouse requests the court to nullify the prenuptial agreement. An uncontested prenup, on the other hand, results in less litigation since there is less need for discovery about the issues covered by the agreement. As a result, the court and the lawyers will have less work to perform.

Who needs a prenuptial agreement:
There are various legitimate situations that could necessitate a prenup, such as:
  1. Either of the parties is business owners:
    • A prenuptial agreement may make sense if the spouses had a business before getting married, because a divorce might ruin a family enterprise. Additionally, if they share ownership of a firm with others, their divorce may have an effect on their ownership stake as well. The parties to a prenuptial agreement may be given complete control over how to run their business both now and in the future. A prenuptial agreement can specify the extent of that stake, or it may grant the business-owning spouse the right to maintain it all together regardless of any contributions made during the marriage.
  2. Both parties or one of them have already been married:
    • Those who have been previously married, particularly those who went through a protracted and traumatic divorce, might not be eager to be married again without understanding what their financial future holds. This is particularly true for people who believe their ex-partner cheated on them or received a superior settlement during a previous divorce. Additionally, a past divorce may have an impact on any future rights and duties derived from a divorce decision or judgment.
  3. Either one or both parties have kids:
    • A party will frequently desire to safeguard the financial interests of kids from a prior marriage. A prenuptial agreement can guarantee that assets remain separate property and enables the parties to set up a living trust or will to take care of their kids in the case of a death. If a parent passes away, having a prenuptial agreement might avert a battle over the will.
  4. One party has more money:
    • When there is an unequal distribution of income between the two partners, prenuptial agreements frequently come into play. The prenuptial agreement can be advantageous to both couples, even though it typically favors the side with the greater earning potential or who owns more property in their name.
  5. One side owes more money:
    • Debts from a previous relationship are often paid back by the original borrower. However, debts accumulated during a marriage may frequently be divided between the couple, which disadvantages the spouse who is not in debt. A prenuptial agreement can assist in guaranteeing that this does not happen if one party has a tendency of overspend and the other party does not want to be held liable for debt accrued during the marriage.

The prenuptial agreement may provide that neither premarital debts of one spouse nor debts incurred by one spouse's company after the marriage may be paid from the communal property of the marriage.

Significance of a prenuptial agreement
Although prenups are sometimes used to safeguard the assets of a wealthy fianc�, more and more couples with lower incomes are using them for their own needs. Some people desire a prenuptial agreement for the following reasons:
  • Give separate property to the former spouse's children:
    A prenuptial agreement is used by couples who are getting married and have children from previous unions to specify what will happen to their assets when they pass away. This allows them to leave distinct assets to their children while still being able to support one another if required. Without a prenuptial agreement, the surviving spouse may be entitled to a significant percentage of the other spouse's assets, leaving substantially less for the children.
  • Clarification of financial rights: Families with or without children, affluent or not, may just wish to be clear about their respective financial roles during marriage.
  • Avoid arguments in the event of divorce: The spouse may wish to avoid arguments or they might wish to outline in advance how their property will be divided and whether or not each spouse will get alimony in order to prevent future disputes if they get divorced. However, in a few jurisdictions, a spouse cannot waive the right to alimony, and in the majority of other states, a waiver of alimony will be closely examined and won't be upheld if the spouse waiving alimony didn't have legal representation.
  • Obtain debt protection: Prenuptial agreements can also be used to shield couples from one another's debts, among other things.

Advantages of a prenuptial agreement
  1. Protect one's true possessions: The assets that are most important to a person are protected by a prenuptial agreement. Prenuptial agreements are frequently drawn up by high-asset or high-net-worth couples so they may better control who would receive what property in the case of a divorce. A prenuptial agreement provides better protection for assets that the person wants to keep in the event of a breakdown of marital relations.
  2. Children's rights protections: Children are frequently shielded by prenuptial agreements, which is one of its advantages. Children and grandchildren from a prior marriage might have their inheritance rights protected by a prenuptial agreement. A prenuptial agreement enables children to be the beneficiaries of certain assets in the case of an unexpected death of a spouse. Children from a prior marriage can likewise benefit from such a clause.
  3. Advantageous for businesses: A prenuptial agreement is a terrific way for those who could own a business to better safeguard their interests. Prenuptial agreements can cover business assets, allowing the person to relax about their company's future in the event of a divorce. A prenuptial agreement can safeguard their business interest so it is not susceptible to partition in the event of a divorce if the person operates a firm. It can be difficult to value and divide a business in a divorce, but by designating it as distinct property in a prenuptial agreement, this difficulty may be avoided.
  4. Prevent transfer of debt: Obligations incurred during a marriage are frequently shared following a divorce, while debts incurred before marriage are not subject to distribution. A prenuptial agreement might shield the person as well as their future spouse from certain debts that accumulate over the course of their marital relationship. A prenuptial agreement formalizes this understanding and forbids one spouse from splitting the debt with the other spouse. A prenuptial agreement can shield one spouse from having to assume the other's debt if the former has a sizable amount of debt. Property and debt are distributed during a divorce. One person might not want to be responsible for paying off their spouse's college loans or credit card debt.
  5. Secure the future against the possibility of divorce: Even though couples have the greatest of intentions when they get married, things can change, and divorce might occur. In the case of a divorce, a prenuptial agreement can assist in giving clarity. If a person gets divorced without a prenuptial agreement, the court will settle any disagreements over spousal support and property division. The person won't know what will be theirs and what will go to their ex-partner until the judge issues his or her ruling. Prenuptial agreements can end this ambiguity. The procedure is under their and their spouse's control, not the court.
  6. Decide along with one's spouse about one's future when the two spouses are on good terms: The conflict and arguing throughout the divorce will be reduced if an agreement is reached before there is anger and damaged emotions. An extended judicial fight will follow a disputed divorce. By signing a prenuptial agreement, the spouses can lessen the anguish and expense that a nasty divorce may bring about.
  7. Preserve family inheritance: A prenuptial agreement can assist them in preserving family treasures or possessions that have sentimental significance much in excess of their market value. They may make sure that certain treasured belongings won't be divided by using a prenuptial agreement.
  8. Decide in advance about the spousal support: A prenuptial agreement can assist safeguard a person's financial interests if they enter into the marriage with significant money and/or a successful job. Spousal support is particularly important if one spouse earns much more than the other.
  9. Protect future interests: The advantages of drafting a prenuptial agreement may be shown even if the person is happily married. Prenuptial agreement preparation requires couples to carefully consider their shared financial future. Couples can fully reveal their financial conditions throughout this procedure to make sure they are entering marriage with informed consent. It might be the start of a conversation about money that lasts the whole of their marriage.

Disadvantages of a prenuptial agreement:
  1. Uncertainty about the future of the marriage:
    The uncertainty that surrounds the marriage as a result of a prenuptial agreement is one of its disadvantages. One school of thinking on prenuptial agreements holds that having one in place indicates that the partnership won't endure as long as the vows promise. Some people might worry whether a partner in a relationship is committed to it over the long term if such an arrangement was made before getting married.
  2. Destroys romance:
    Nobody's concept of romance involves signing a document that specifies how assets will be distributed in the case of a divorce. Many individuals agree with this opinion. Many people think that a prenuptial agreement can harm a relationship's romantic component.
  3. Fosters a climate of mistrust:
    A prenuptial agreement is not simple to draft. It is necessary to have conversations about money and property, and these conversations can be contentious and cause resentment. There may be arguments between the person and their spouse over how certain assets should be shared in the case of a divorce, and these conflicts can breed mistrust. Some people could experience sentiments of mistrust over the assets as a result of a prenuptial agreement. Why the other spouse would go to such efforts to safeguard an asset may be a subject of debate. The marriage might end sooner than intended as a result of these emotions.
  4. Rights from spouses' inheritance may be forfeited:
    A person's right to receive their spouse's inheritance after their passing may be forfeited according to the terms of the agreement. Even if the spouse does not make such a provision in his or her will, the person is still legally entitled to a piece of the inheritance.
  5. Not eligible to benefit from a rise in the value of spouses' assets:
    If the person agree differently in a prenuptial agreement, the person could not be eligible to receive a portion of the rise in value if they assist their spouse in running their company or professional practice by entertaining customers or taking care of the property. This rise in value would be regarded as divided marital property under the rules of several states.
  6. Challenging to predict the future issues faced by the spouses:
    It can be challenging to predict how future problems should be resolved, and what could seem like a little concession during the passionate premarital stage may appear more significant and onerous afterward.
  7. May make the spousal support inadequate:
    If the agreement drastically reduces the amount of spousal support to which that spouse is entitled, a low or non-wage-earning spouse might not be able to maintain the standard of living to which he or she has grown accustomed throughout the marriage.

Disadvantages of a lack of a prenuptial agreement
If a person doesn't form a prenuptial agreement, their state's laws decide who owns the assets they obtained during their marriage and what becomes of that property in the event of divorce or death. Spousal support is particularly important if one spouse earns much more than the other. (Depending on their state, property gained during their marriage is referred to as either marital or community property.) Even what happens to some of the possessions one had before getting married might be governed by state law.

Their state has several family laws that govern how property is handled before and after marriage in the absence of a prenuptial agreement. For example, a person's spouse is entitled to the following in most states:
  • Share the ownership of whatever assets the couple acquires during their marriage.
  • Get some of the person's belongings when they pass away.
  • A proportionate share of any debts incurred during the marriage.
  • Share management duties for property purchased during the marriage period.

There are several justifications for breaking the laws of their state. For instance, if a person has children from a prior marriage, she/he might prefer that his assets go to them rather than her/his current spouse when she/he passes away. Premarital agreements have the benefit of allowing the person to customize them to their specific requirements.

According to the law, marriage is seen as a contract between the couple, and as such, each spouse acquires some automatic property rights. For instance, unless a prenuptial agreement specifies otherwise, a spouse typically enjoys the rights, which include sharing the control and management of any marital or community property, sometimes including the right to sell it or give it away, and incurring debts during the marriage that the other spouse may be responsible for paying off.

Share ownership of assets possessed during the marriage, with the anticipation that the property will be separated between the partners on the occasion of a divorce or at death. A prenuptial agreement might help safeguard their financial interests if they are entering into a marriage with significant money and/or a successful job. The advantages of drafting a prenuptial agreement may be shown even if they are happily married.

Prenuptial agreement preparation requires couples to carefully consider their shared financial future. Couples can fully reveal their financial conditions throughout this procedure to make sure they are entering marriage with informed consent. It might be the start of a conversation about money that lasts the whole of their marriage.

Considerations before opting for a prenuptial agreement

Why a person should opt for a prenuptial agreement
The following are some advantages of a prenuptial agreement:
  • Keeping records of the individual property of each spouse in order to preserve it.
  • Supporting one's estate plan and keeping the division of property out of court.
  • Defining what belongs to the couple and what belongs to the community.
  • Describing in detail any unique arrangements the person and their spouse have made.
  • Avoiding protracted legal processes, which might reduce the cost and duration of a divorce.
  • Minimizing disputes throughout a divorce.
  • Establishing protocols and guidelines for any future problems.
  • To prevent both couples from sharing financial responsibilities, debts like credit cards, student loans, and mortgages should be assigned to the appropriate spouse.

Many people worry that talking about these issues or even using the term "prenuptial agreement" would strain their marriage. The contrary is true a lot of the time. Finances are one of the most typical irreconcilable issues that cause divorce. Many of these arguments may be avoided by discussing money, property, and the management of marital assets with one's spouse in advance.

Why a person shouldn't opt for a prenuptial agreement
Although nuptial agreements have many advantages, the person should think about certain drawbacks before drafting one.
  • It lacks romance, so a person may want to consider avoiding the topic if they worry that talking about how to divide their assets and debts and the potential for a divorce or separation would somehow sour their relationship.
  • It might not be the best moment, so it might be best to wait until after marriage, when the spouses could be a bit more experienced with home administration. A "postnup" is a contract established after they are married.
  • The spouses might be able to resolve all of their concerns without a prenuptial agreement owing to well-defined state regulations.
  • On the other hand, if there are any legal gaps in their position, it may be advisable for the spouses to address them in a prenuptial agreement.
  • Child support and custody clauses are prohibited in prenuptial agreements. The determination of child support is ultimately up to the court. The "best interest of the child" criterion, which takes into account a number of variables, is how the court decides child support.
  • Any provisions that a court deems unjust or not in the interests of justice may be annulled. For instance, if the account holder made significant contributions to the bank account throughout the marriage, courts have overturned clauses that don't permit a spouse to receive any portion of the other's bank account.
  • Personal preferences, such as who should do what tasks, where to spend vacations, what school the children should join, or what religion they should be reared in, cannot be included in a prenuptial agreement. Prenuptial agreements are designed to handle financial matters, and courts have refused to enforce clauses that aim to control marital occurrences on a daily basis.
  • The talks weren't attended by either spouse. It's possible that the agreement will substantially benefit one of the spouses if they don't negotiate the terms or other details together.
  • It could make others feel uneasy and hurt. A relationship may start to take on the emotions that prenups elicit.
  • Conflict with large families. When a child or daughter signs a prenuptial agreement, in-laws may be especially upset and believe the marriage is already "doomed."
  • Future occurrences are subject to the prenuptial agreement. It is difficult to foresee financial and future situations, thus some of the events described in a prenuptial agreement might or might not occur.

Essential features of a prenuptial agreement
Only when it is signed before marriage is a prenuptial agreement considered legally binding. A postnuptial agreement is one that a couple may create after being married.
There must be a marriage between the parties subsequent to entering into a prenuptial agreement.

Prenuptial agreements must be in writing since they are typically not enforceable otherwise.

Both parties must have an opportunity to consult legal counsel before entering into a prenuptial agreement
Complete and/or fair financial disclosure must be done prior to execution.

Execution of the prenuptial agreement must be voluntary.

The prenuptial agreement cannot be unethical. They must conform to fairness and public policy standards to be enforceable.

The facts of the agreement at the time of execution frequently determine what defines substantive fairness. These factors are frequently known as the 'Button factors' following the case of Button v. Button (1986)[9]. These comprise the parties' goals, the partners' personal financial position, the property each possessed before getting married, the existence of additional familial commitments, each party's income, and age, physical and mental capacity, and the estimated contributions of each partner to the marriage, the emotional well-being of the parties, as well as each party's expected educational and career objectives incorporating the notion that one party will provide domestic and parental support.

The prenuptial agreement must be signed by the parties themselves (not by their attorneys) and be witnessed or notarized.

Contrary to conventional contract law, consideration is not necessary here, albeit some courts have cited marriage as the consideration. A prenuptial agreement allows a spouse to totally forego their rights to the elective share, property, alimony, and inheritance while receiving nothing in exchange.

The choice of legal clauses in prenups is crucial. The parties may prefer to have the agreement and the division of property upon divorce governed by the laws of the state in which the parties are married. Property and support concerns are decided by the law of the state where the parties divorce, not the law of the state where they were married, in the absence of a choice of law agreement.

  1. Vanella R, "Prenuptial Agreements: What Do the Statistical Trends Say?" (, June 3, 2022) accessed February 6, 2023.
  2. "US Gov Census" accessed February 3, 2023.
  3. Bridebook, " Marriage Report 2017" (Bridebook) accessed February 6, 2023.
  4. "American Academy of Matrimonial Lawyers" ( September 16, 2022) accessed February 2, 2023.
  5. Jessica Dickler, "Are Millennials Financially Doomed?" (CNBC October 13, 2015) accessed February 6, 2023.
  6. Graebel, "Millennials See Mobility as Essential for Career Advancement" (Millennials See Mobility As Essential For Career Advancement June 29, 2018) accessed February 6, 2023.
  7. "History of Marriage Contracts in Egypt" accessed February 6, 2023.
  8. "The Married Women's Property Act, 1874" accessed February 6, 2023.
  9. [1968]1All ER.

Disclaimer: The information contained in this post is provided for informational purposes only, and should not be construed as legal advice on any subject matter. Kindly seek legal or other professional advice since the contents of this post contain general information and may not reflect current legal developments or address your situation. The author of this post accepts no liability from the contents of this post.

Written By: Tejaswini Kaushal, 2nd year B.A. LL.B. (Hons.) student, Dr. Ram Manohar Lohiya National Law University, Lucknow, Uttar Pradesh.

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