Contrary to popular belief, prenups must be reasonably fair, or they may be at risk of being thrown out. They don’t need to be 50/50, but there needs to be a level of fairness involved in the prenup. How do you get to a fair prenup? One way is through negotiating, of course! You wouldn’t want one person making demands and the other person simply agreeing to everything. It’s not likely that the other person’s needs are met in such an agreement. Both people need to speak up and voice their goals, needs and wants during negotiations.
Never fear; HelloPrenup is here… with some tips and tricks for negotiating a fair prenup agreement:
Start the conversation early
Starting early is one of the most important tips for negotiating a fair prenuptial agreement. HelloPrenup recommends starting the prenup process three to six months prior to your wedding date. By beginning the conversation well in advance of your wedding day, you and your partner will have ample time to think through your financial goals and priorities and to seek legal counsel if necessary.
Starting early also gives you both time to discuss any concerns or fears you may have about the future. This can help prevent any last-minute surprises or disagreements and ensure that both parties are on the same page. Additionally, starting early allows for more thorough and comprehensive agreements that better protect both parties.
Additionally, if you require an attorney for your situation, starting early allows you to seek legal advice and have a lawyer review your prenup before you sign it. This will ensure that the agreement is legally binding and that it’s fair and reasonable for both parties. Friendly reminder: not everyone needs lawyers to generate a valid prenup. Whether or not you need a lawyer depends on your state’s laws and your personal situation.
When it comes to prenups, it’s better to be proactive than reactive. Starting the conversation early will help ensure that the agreement is fair and equitable for both parties and that you can approach your marriage with peace of mind.
Be transparent and honest
Being transparent and honest with your partner is key to negotiating a fair prenup. It’s crucial to be open and honest about your life goals, expectations of your future spouse, and finances, as this will help ensure that both parties are on the same page and that the prenup is fair and equitable.
Along the vein of finances, it is extremely crucial to be open about any potential red flags, such as a large amount of debt or a significant difference in earning potential. It may be scary or uncomfortable to share this type of information, but it is legally required in the financial disclosure phase of the prenup process. Not only is it legally required, but being open about red flags also helps prevent any surprises or disagreements down the road and ensures that both parties are aware of the financial situation.
Being transparent also includes being upfront about your goals and expectations of the other person. Do you want to retire when you’re 45? Do you want to be a stay-at-home parent? That house your parents plan on giving you, do you want to keep that separate? Do you expect your spouse to pay certain bills? Now is not the time to tiptoe about your spouse’s feelings. Sure, you shouldn’t be brash or rude, but not speaking up to spare your spouse will only cause you more harm in the long run.
Consider each other’s needs
When negotiating a prenuptial agreement, it’s important to consider each other’s needs and priorities. A prenup is not just about protecting your own assets but also about protecting your partner’s interests.
For example, your partner may have a large inheritance or family business that they want to keep separate in case of a divorce, while you may have a strong desire to keep the marital residence. By understanding each other’s needs and priorities, you can work together to create a prenup that is fair and equitable for both parties.
It’s also important to consider each other’s future goals and plans. For example, one partner may want to continue to invest in a business while the other partner may want to focus on paying off debt. By considering each other’s financial goals and plans, you can create a prenup that takes into account the needs of both partners.
Be open to compromise
Negotiating a fair prenup is a balancing act. On the one hand, you need to look out for yourself and make sure your needs are met. On the other hand, you need to take your partner’s needs into consideration. So, how do you meet in the middle? Compromise! It’s important to approach the negotiation process with a willingness to compromise. This means being willing to listen to your partner’s perspective and finding a middle ground when there are disagreements.
For example, if one partner wants to keep all assets separate in case of a divorce, while the other partner wants to have joint property, a compromise could be to have a joint property but have a sunset clause that invalidates the prenup after a certain date, say 20-30 years down the line.
Pro tip: sunset clauses are great negotiation tools because you can set a date for the prenup to expire in the future, say 10, 20, or 30 years down the line, when things will be much different.
Being specific is a key component of negotiating a fair prenuptial agreement. When going through the prenup-making process, it’s important to be specific about your goals. What exactly do you want? What are your non-negotiables? Don’t just say, “I want to protect my assets” to your partner. That could mean a million different things to someone. Instead, try saying, “I really want to make sure my house on 123 Apple St. and my 401(k) is protected and kept separate.” Being specific helps prevent any confusion or misunderstandings in the future.
Consider future contingencies
Consider future contingencies, such as the potential for a change in income, the addition of children, future inheritances, etc., and include provisions for these contingencies in the agreement. This will help to ensure that the agreement remains fair and equitable over time.
For example, if you two don’t have kids now, is there a possibility you will have kids in the future? If you’re on the fence, you may want to consider both outcomes: if you do have kids and if you don’t have kids. Having kids may significantly alter the decisions you make regarding your prenup.
There is also the possibility of one partner’s income changing significantly in the future, either due to a promotion, a change in career, or other reasons. If you think this is a possibility for you, you may want to consider this when making prenup decisions.
Seek professional help assistance, if necessary
If negotiating isn’t going well, seeking professional help may be the way to go.
One way to seek professional help is by hiring a lawyer who specializes in family law and prenuptial agreements. Attorneys can help you negotiate and come to an agreement by giving you real-world examples, suggestions, and best practices. Not to mention, negotiation is one of the key roles of an attorney and is what they are trained for! On top of that, a lawyer can help you understand the legal implications of the contract and can ensure that the terms and conditions of the agreement are fair and reasonable.
If your main hang-up is something financial in nature, you might consider seeking out a financial advisor. A financial advisor can help you understand the financial implications of the agreement and can help you create a plan for dividing assets and property that is fair and equitable for both parties.
Don’t forget the emotions
Negotiating a prenuptial agreement can be an emotional process. It’s a good idea to approach the conversation with empathy and understanding and to avoid getting defensive or confrontational.
For some couples, discussing a prenup may feel like they are planning for the worst-case scenario, which can be emotionally difficult. It’s essential to remember that a prenup is not a prediction of the future but rather a tool that can help protect both parties’ financial interests and prevent future conflict.
It’s also important to remember that discussing a prenup doesn’t mean that you don’t trust your partner or that you don’t believe in your marriage. Instead, it’s a way to ensure that both parties are on the same page and to plan for any potential future scenarios.
Discussing a prenup is a form of financial planning, just like discussing retirement or investment plans. It’s a way to ensure that both parties are aware of the financial situation and that both parties’ financial interests are protected.
Review and update the agreement
As time passes and circumstances change, it may become necessary to review and update the prenup.
For example, if you start a business or inherit a significant amount of assets, you may want to make some changes to the agreement to maintain its fairness. If circumstances have changed so drastically, the prenup may no longer be fair from one vantage point.
If you do want to update the agreement, you’ll want to contact a lawyer and discuss amendments. An amendment is a legal term for updating a prenup.
The Bottom Line
A prenup can be a great tool for protecting both parties’ financial interests, but it’s important to approach the process with care and consideration. By starting early, being transparent, seeking legal advice, considering each other’s needs, being open to compromise, being specific, considering future contingencies, seeking professional help when necessary, and not forgetting the emotions, you can negotiate a fair prenup agreement that will bring peace of mind and protect both of your interests!
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: [email protected]