Prenups outline the financial and property rights of each spouse in case of divorce and sometimes death. While prenups are becoming more common, many couples are still unsure about the costs associated with drafting and enforcing these agreements. Depending on which route you go to get a prenup (using HelloPrenup or an attorney), the cost may differ. In this blog, we will explore the various costs associated with prenups and discuss how to minimize them.
What is a prenup?
Before diving into the different costs associated with drafting and enforcing a prenup, let’s discuss what a prenup actually is. A prenup is an agreement between two people who are about to get married. Prenups must be completed before the marriage takes place; otherwise, it is not valid. It generally includes topics like property division, alimony (i.e., spousal support), and debt assignment, among many other things. Prenups can also cover obligations during the marriage, in addition to matters in the event of divorce.
Cost of drafting the prenup
The first cost associated with prenups is the cost of drafting the agreement. This cost can vary depending on a few factors. The first factor is how you get the prenup done. Do you use a lawyer or HelloPrenup? If you’re using HelloPrenup, the cost is a one-time fee of $599, whereas the cost of getting a prenup with an attorney is much different. Getting a prenup with an attorney can cost anywhere from $2,500 to $10,000 or more. The average prenup from an attorney costs about $2,500. How much a lawyer charges depends on their location, skill level, and experience level. Some lawyers charge by the hour, while others charge a flat fee for drafting a prenup. The second factor is the complexity of the agreement, which can also increase the cost. If you have a particularly complex set of finances or requests, or you require a lot of negotiation, your cost will be higher.
Cost of enforcing the prenup in court
The second cost associated with prenups is the cost of enforcing the agreement. This cost can occur if one of the spouses decides to challenge the prenup and argue that it is not enforceable.
The cost of enforcing a prenup can vary depending on the complexity of the case and the lawyer you choose to represent you. Also, if the case goes to a litigated trial, then the cost will be significantly higher.
A lawyer will generally charge hourly for enforcing a prenup and resolving other divorce issues. If you live in a high-cost-of-living area and choose a lawyer with a ton of skill and experience, you’re going to be looking at a higher hourly rate and higher overall cost.
It is not very common that you would make it to a litigated divorce trial, as that takes a lot of time and money, and most people will decide to settle before it gets to that point. However, if you do make it to the litigated divorce trial to enforce your prenup, there are lots of miscellaneous expenses involved. Let’s break down the costs of enforcing a prenup in a litigated divorce trial:
- Legal Fees: Both sides will have to pay for the services of their own attorneys (unless stipulated otherwise). The legal fees can be substantial, especially if the case goes to trial.
- Court Fees: There are fees associated with filing a lawsuit and going to court, such as filing fees, service of process fees, and fees for experts or witnesses.
- Discovery Costs: During the discovery process, both sides will have to gather evidence to support their case. This can include document production, depositions, and expert witness testimony. These costs can be high.
- Appraisal Costs: If the prenup involves the division of real property or other assets, it may be necessary to hire appraisers to determine the value of the assets.
- Mediation or Arbitration Costs: In some cases, the couple may choose to go through mediation or arbitration to resolve disputes rather than go to court. These processes can be less expensive than a court battle, but they still have costs associated with them.
Cost of mediation
The third cost associated with prenups is the cost of alternative dispute resolution, such as mediation, which is a process where a neutral third party helps the couple to reach an agreement. The cost of mediation can vary depending on the mediator you choose and the length of the mediation. The cost of divorce mediation, in general, may be anywhere from $3,000 to $8,000.
Many couples choose to mediate their prenup rather than going to court and may include a clause that says so in their prenup. Some people choose to include a clause that says something along the lines of “we will mediate this prenup and any divorce issues and share the costs of this process.” The clause may also include how many sessions will be required in mediation before moving on to file with a court.
You may be feeling a little sticker shock while reading this article, and we get it! Legal stuff can get expensive! Don’t worry, though; we have some tips and tricks to cut down on costs.
First, you can use HelloPrenup’s platform, which offers a one-time, NO HIDDEN FEES cost to drafting the prenup ($599 per prenup). If you’re not into us, it’s cool; there are still other (more expensive) options. You can try to hire a lawyer who charges a flat fee for drafting the prenup. Many lawyers will charge hourly for this, but if you can find a flat rate, that may be a cheaper route. If that’s not possible, try finding a lawyer with a lower hourly rate. Attorney hourly rates can range from $100 to $1,000 or more, depending.
Second, you can draft a prenup that is simple and straightforward. This can help to reduce the overall cost of the prenup. How? Well, the simpler the prenup, the less work on the attorney’s end when it comes to drafting the prenup. You can also keep negotiations minimal to cut costs. The less time spent on negotiations, the less money you will spend overall on attorney’s fees. If you spend hours and hours negotiating your prenup, that’s going to add up to a lot of billable attorney hours. To sum it up: keep it simple, and you’re likely to minimize costs.
Third, you can choose to mediate your prenup rather than going to court. This can also help to reduce the overall cost of the prenup. Mediation generally costs less than filing in court because you aren’t paying high attorney fees and court costs. Instead, you may only be splitting the hourly rate of the mediator. You can ensure that you save costs by using mediation by adding a mediation clause in your prenup. The mediation clause can mandate that mediation is required before filing in court, and the costs will be split equally.
The Bottom Line
In conclusion, prenups can be super helpful to many different people. However, there are costs associated with drafting and enforcing these agreements. The cost of drafting a prenup can range from $2,500 to $10,000 or more, while the cost of enforcing a prenup can range greatly. To minimize the costs associated with prenups, couples can choose a lawyer who charges a flat fee, negotiate a simple and straightforward prenup, and choose to mediate their prenup rather than going to court. It’s important to consider these costs when deciding whether to enter into a prenup.
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]