How to Determine Who Gets What in a Prenup

Feb 16, 2023 | Prenuptial Agreements

Okay, you’re considering a prenup, but what the heck do you put in it? How do you even decide on these things? Well, to put it frankly, it’s up to you (within the legal boundaries of prenuptial agreement laws, of course). No one can sit here and tell you what you want to do, but we can give you some tips, tricks, and anecdotal reasons why other people might do one thing or another. Buckle in because we’re going to take a deep dive into how prenups work and what the different topics are that you might consider putting into your prenup.


How does a prenup work? 

A prenup is a contract between you and your soon-to-be spouse. It must be executed before the wedding day; otherwise, it’s not valid. Prenups are also only effective upon marriage, so if you never end up getting married, your prenup is nullified. A prenup covers topics like debt allocation, property division, and alimony (i.e., spousal support or maintenance), among other topics. Prenups famously handle matters in divorce but also obligations during the marriage, as well. 

What goes into your prenup is pretty much up to you. There are certainly some parameters set out by state law that tell you what you can and cannot include (for example, most states do not allow you to include child support or child custody). As long as you stay within the state parameters, you have free reign to put what you want in your prenup. There’s no copy-and-paste prenup that works for everyone, as every couple has different finances, needs, and goals. Maybe you really want your prenup to include separate inheritances, waiver of alimony, and separate property. Someone else’s prenup may instead focus on keeping alimony and keeping all property joint. It’s quite variable! 

Prenups are dictated by state law. Each state has its own rules and regulations around prenups, including the requirements to get one. Many states have comparable requirements, such as putting it in writing, signing it, notarizing it, and making sure both parties are voluntarily signing the document (not under force). Other states may have different requirements, such as mandating witnesses be present at the signing or requiring that the prenup be executed at a certain time frame before the wedding. What is considered a valid prenup in Illinois may not be considered a valid prenup in California.

Most people hope to never have to use their prenup. However, if the day comes and you are getting a divorce, you may invoke your prenup. You can do so privately between you and your spouse, or you might ask the court to enforce it. Don’t forget; many people never have to worry about this because they never get divorced! 


How to determine what goes into your prenup

As we said earlier, this is a job for you and your partner to work out. Within the legal limits, you two can determine what’s best for you. What you include (or don’t include) is a personal decision that is quite unique to each individual couple. With that being said, we’ve rounded up some brain food for you to get the conversation going. Keep reading to learn what some of your options are for crafting a prenup.


Property division

The heart and soul of a prenup is property division. Whether or not you want to keep everything separate or everything shared, you’ll want to say so in your prenup. Property is what makes up a large part of our net worth. Property can include real estate, bank accounts, retirement funds, investments, cryptocurrency, artwork, and much more. 

There are two main terms you should get familiar with, separate property and marital/community property (depending on which state you’re in). If you deem something to be separate property in your prenup, you are saying it is yours and yours alone. Your partner cannot touch it. If you deem something to be marital/community property in your prenup, you are saying this is a shared asset, and you’re okay with it being split up in a divorce. What to do is up to you and your partner. Some introspection is definitely in order! 


Alimony (i.e., spousal support or maintenance)

Do you want to ride the alimony pony or not? That is the question. There are many different ways to handle alimony in a prenup. One of them includes waiving it all together. You can completely take it off the table and remove that as an option. This may be good for folks who both have strong careers, similar net worth, and don’t plan on staying home with kids. 

You can also leave it up to the courts to decide on alimony. In other words, you completely defer to a divorce court to make the decision on your behalf. This may be good for people who aren’t sure what their future holds. Maybe they’re on the fence about staying home with the kids or don’t have a solid career path.

There also may be the option of capping alimony. This can be tricky and also state-dependent. This may be in the form of limiting it to a certain dollar amount or percentage or even limiting the sources of income alimony may come from. 

Keep in mind alimony is dictated by state law, and states can vary greatly on what is allowed in a prenup and how alimony is determined. For example, when you waive alimony in a prenup in California, you must have an attorney; otherwise, the alimony clause will be considered invalid. 


Debt assignment 

What do you want to do about debt? There is premarital debt, meaning the debt you took out before getting married, and then there is marital debt, meaning the debt you take out during the marriage. The question becomes: do you want premarital debt to be separate debt or joint debt? What about marital debt? Keep it all separate or share it? 

For example, maybe you have a ton of student debt that you took on before ever laying eyes on your honey. In that case, you and your partner might agree that it’s best you keep that debt separate. And maybe you two plan on starting a business together during the marriage and taking on business debt. In that case, you might say marital debt should be joint debt! It all depends on your life.


Lump sum payment 

A lump sum payment is something that you can choose to include or not include in your prenup. It’s a clause that basically says Spouse A pays Spouse B $_____ upon divorce. It’s sometimes called an equalization payment because it can equal out financial imbalances. This may be a useful clause for someone who has a lot less money than their partner, and a lump sum clause can be used to balance out finances and also power dynamics in the relationship. 

This clause may also be useful for someone who stays at home with the children. That person may not have any income or assets, and a lump sum clause would help get them back on their feet and find a career to support themselves.


Primary residence 

Who shall live in the primary residence while the divorce is pending and afterward if anyone at all? This clause is another one you can leave out if you wish. But if you want to address it, then by all means! This clause might say Spouse A may live in the primary residence during the divorce and for ____ years after the divorce is final. This can be beneficial for spouses with less money or for spouses that stay home with the kids. Allowing the stay-at-home spouse to stay in the marital residence with the kids would probably be helpful for many families. And if you have significantly less money than your spouse, being able to reside in the primary residence for a period of time can help you get on your feet while you figure out your life.


Pet ownership 

What about your sweet little furry friends? Do you want to include them in your prenup? If so, you can add a clause that dictates the “custody” of the pet in the event of the divorce. The clause might say something like, Spouse A will have ownership of Fluffy in the event of divorce and will also be responsible for all costs associated with him/her. Of course, you can always leave this clause out and leave it up to the courts to decide. However, you should know that many states still treat pets like personal property in a divorce and may use common property principles to determine ownership, such as asking, “who bought the pet?” to determine custody. Yikes! Predetermining ownership of your pet in your prenup can definitely provide some peace of mind.


You are writing your life story. Get on the same page with a prenup. For love that lasts a lifetime, preparation is key. Safeguard your shared tomorrows, starting today.
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