A prenuptial agreement (or, as the kids say, a prenup) is a contract outlining how a couple’s finances would be handled during their marriage and in the event of divorce. Think of it as choosing your own rules instead of letting state laws dictate the outcome. Prenups offer clarity on finances, give you control over what’s fair, protect your assets, and even encourage important money conversations! Most prenups tackle big questions like who keeps what property, whether there’s alimony (spousal support), how to handle debt, what happens to inheritances and gifts, and even how finances will work during the marriage (joint bank accounts?). A prenup can offer peace of mind and a chance to plan your future together. Let’s dive into some of the most common prenup clauses out there!
What is a prenup, and why should you get one?
First, let’s get a little background on this topic. What is a prenup? A prenuptial agreement is a contract between two soon-to-be spouses outlining how their assets, debts, and other financial matters will be handled during the marriage and if the marriage ends. Here’s the surprising part: you already have a prenup, even if you don’t create one! That is, without a custom agreement, your state’s divorce laws dictate how things are split. Essentially, you’re either making your own choices about your future or letting the state decide for you. NEED we say more?
The benefits don’t stop there! Here are some other frequently cited benefits of getting a prenup:
- Clarity on finances: Thanks to the financial disclosure requirement, both spouses are legally required to share ALL of their finances with one another.
- Expectation setting: Prenups set expectations between spouses for how certain assets and property should be treated.
- Peace of mind: Just like you feel more secure getting travel insurance, health insurance, car insurance, etc., getting a prenup can give you peace of mind that you’re not signing away your hard-earned money.
- Communication practice: Think of the prenup process as your first joint task as a future married couple. The process itself requires in-depth communication, so now’s your chance to practice!
- Reassurance for children: If you have kids from another relationship, you can rest assured that they are financially protected as well.
- Planning for your marital future together: Prenups require you to talk about the future: Are we having children? Will someone start a business? When do we each plan on retiring? These sorts of questions tend to arise in the process.
- Don’t forget about your pups: Dog and cat lovers everywhere can sleep a little sounder at night knowing that their precious fur babies are protected with their prenup.
We could keep going on and on forever about the benefits of prenups, but we’ll spare you! Next up, let’s talk about some of the most common prenup clauses.
Most common prenup clauses
Let’s turn our attention to what is typically included in a prenup. What are the common clauses people tend to include? Spoiler alert: Property division and alimony tend to be the top contenders. But there are plenty of other frequent appearances from other clauses, as well. Let’s dive in.
Property division
By a landslide, property division is the most common clause that goes into a prenup. Think: Who gets what? Who gets the house? Who gets the jewelry collection? Who gets the bank account? Property division typically doesn’t get sorted out in one single clause, though. It’s typically several clauses to parse out what should be considered Separate Property of each party and what should be considered Marital/Community Property of each party. If something is considered Marital/Community Property (i.e., shared property), how should that be split? Should it be 50/50 or according to contribution? Lots of things to consider and include about property division in a prenup!
Alimony
Depending on what state you are in, alimony may be called something else, such as spousal support or spousal maintenance. Still, they all refer to the same thing: financial support from one spouse to the other after the marriage ends. Many people fear alimony because it sounds scary–paying money to your ex?? Who wants to do that? Well, sometimes it’s necessary, for example, if one spouse quits their career to hold down the home and take care of the kids. Now, if the marriage ended,d what are they supposed to do? If they are capable of finding a job, that can take time! So they may need support in the meantime. Some people want to use a prenup to waive alimony (i.e., get rid of the possibility of it in a divorce).
Debt division
Dun, dun, dun. Debt! Did we scare you? We know debt is a spooky topic, but rest assured that prenups can ensure your debt stays yours and your partner’s debt stays theirs. Whether it’s accrued during the marriage or before– a prenup can (and usually does) parse out who owns what debt. No more night sweats about taking on your partner’s dumb financial decisions.
Inheritances
Expecting a big, fat check from Uncle Bob one day? Rest assured that a prenup can ensure that money stays separate. And, no, it’s not automatically protected by state law in every situation. There are cases where state law will split up an inheritance in a divorce (unless you have a prenup, that is).
Gifts
Gifts between you and your spouse or gifts from third parties–prenups tend to delineate who owns what gifts. For example, if your boo gifts you a $100,000 engagement ring (lucky you!)– but is that yours or theirs? Or what about those wedding gifts? Or that $10k check Mom writes for you every Christmas? Prenups typically handle these types of questions.
Death
Arguably, the least fun prenup clause: death. Prenups tend to state what should happen to certain things upon death. WARNING: Prenups are not a replacement for a valid estate plan. Instead, prenups are a nice supplement to a valid will and/or trust. For example, you can waive your spousal right to inherit from your partner in a prenup in certain states, make sure that your will dictates what happens to your stuff, and/or require your partner to get a will.
Management of finances during marriage
Prenups aren’t all about divorce. They also speak to what should happen during the marriage. Such as whether or not you two will get a joint bank account or keep it all separate. If you do get a joint bank account, how will that account be managed? Who deposits what? Who withdraws what? And, of course, how would that joint bank account be theoretically split in the event of a divorce?
Marital residence
Another common clause to include is how the marital residence will be treated in the event the marriage ends. Picture this: Julie is a stay-at-home mom. John is the breadwinner who goes to his corporate job every day. They have three young children, ages 5, 8, and 10. If Julie and John get a divorce, it’s going to be very tough on the kids with all of the change happening. One thing that would potentially keep it relatively stable is allowing Julie and the kids to remain in the marital residence, even if John owns it. That could be forever or for a period of time while the divorce is pending, or something else.
Frequently Asked Questions (FAQs) about common prenup clauses
The people asked–so we answered. Here are your most common questions about prenup clauses.
Q: Can I add an infidelity clause to my prenup?
A: It depends on your state. Some states, like California, the answer is a hard no. Courts will not enforce an infidelity clause, and it could put the entire agreement at risk. Other states may be more likely to enforce.
Q: What can’t a prenup include?
A: Prenups generally cannot include child custody matters, child support matters, illegal acts, incentives for divorce, and, in some states, lifestyle clauses such as no-cheating or no-drugs clauses.
Q: Can I put whatever I want in a prenup?
A: Prenups primarily focus on financial matters – assets, debts, alimony, etc. While demanding your spouse pet 100 elephants daily might be hilarious, courts won’t enforce it. Stick to clauses that are both financially relevant and legally reasonable.
The bottom line on common prenup clauses
Prenups aren’t just for the ultra-rich! They’re a smart tool for any couple wanting clarity, control, and protection when it comes to their finances. Remember, even without a prenup, state laws dictate these things. So, it’s about proactively making those decisions for yourselves. Common clauses like property division, alimony, debt management, and even how finances work during the marriage offer a roadmap for those “what if” scenarios. A prenup can offer peace of mind and foster open communication – both great foundations for your marriage!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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