If your spouse refuses to negotiate your prenup, your marriage may have a bigger problem than just an unfair prenup at play. Negotiation is truly embedded in the foundation of the prenup process. There’s really no way around it. If you don’t allow negotiation to take place, you run a risk of having your prenup invalidated. What’s an invalid prenup, you ask? An invalid prenup is one that is sitting in a trash can, unused, and a huge waste of money.
Remember, people: negotiation helps make prenups fair, as both sides are able to voice their needs and desires. Without negotiation, it’s just a one-sided contract that will probably be invalidated.
Still don’t believe us? Keep reading to learn about real people with real prenups that got thrown in the trash for lack of negotiation.
What is a prenup?
A prenuptial agreement (i.e., prenup) is a contract made between two fiancés before the wedding day. A prenup cannot be made after the wedding, and it is only effective upon marriage. No marriage? No prenup. Prenup made after the wedding? Not a prenup.
Prenups cover an array of topics, both financial and non-financial in nature. The “meat and potatoes” of a prenup are generally property division, debt allocation, and alimony (i.e., spousal support or maintenance). Other clauses that may be included in a prenup include pet ownership (i.e., pet “custody”), confidentiality, social media image, lump sum payments, infidelity, and more.
What is the process of getting a prenup?
There are generally four stages of getting a prenup:
- Deciding what you want to put in the contract,
- Financial disclosure,
- Negotiation, and
On HelloPrenup’s platform, we break it down for you in a simplistic way. First, you go through a questionnaire (this is the first step in deciding what you want to put in the contract). Here, you will answer questions about different topics, and your answers will help create a customized prenup. Second, the platform will take you to a financial disclosure stage where you will input all of your finances on a financial schedule. We make it super easy to input all of this information with tips and tricks.
The third is the negotiation phase. The HelloPrenup platform provides side-by-side discrepancies in you and your partner’s answers. If your partner put X, but you put Y, the platform will notify you and force you to come to an agreement. You cannot move forward until you have both agreed on every last term.
Fourth and finally, the finalization stage. This stage involves downloading the agreement, having it notarized, and signing (and witnesses if you live in a state that requires it). And voilà! You have yourself a freshly inked prenup. We love that smell!
Why negotiating a prenup is important
As you can see from the section above, negotiation is a major component of creating a prenup. Without negotiation, how do you create a fair prenup? It’s nearly impossible. But why is a fair prenup important, you ask? Well, a fair prenup is a valid prenup. When prenups are extremely one-sided or unfair, they can be thrown out by a court. Sometimes, a prenup is referred to as “unconscionable” if it’s too unfair. When a court deems a contract unconscionable, it’s likely unenforceable. Moral of the story: unfair prenups lead to invalid contracts. Invalid contracts are typically thrown out. Catch our drift?
Prenups should not only be fair for legal reasons but also for each party’s well-being. What good is a marriage if only one person is benefitting? Marriage = partnership. It’s crucial for happiness and a successful marriage to have a fair prenup that allows both people to feel comfortable and secure.
Not to mention, do you really want to be with a partner who only wants the prenup to benefit themselves? A good partnership is one with compromise and understanding. If your partner is not willing to negotiate the prenup, you may have a bigger problem on your hands than just an unbalanced contract.
Real-life examples of prenups
Let’s dive into some real case law discussing unfair prenups. As you’ve read by now, without negotiating a prenup, it’s quite difficult to craft a fair and balanced prenup. Negotiation is key to allowing both sides to have their needs met.
A prenup deemed unfair
This cautionary tale comes to us from Missouri, where a court declared a prenup unfair, unconscionable, and unenforceable. The husband, in this case, was a businessman, and the wife was a homemaker. The prenup in question allowed the husband to keep all of his assets separate, even future assets. At the same time, the prenup also split any and all debt equally between husband and wife. So, essentially, the wife got none of the earnings but took on some of the debt, all the while staying at home and taking care of the house and kids. Not to mention, the husband presented the prenup to her just a few days before the wedding. She had minimal time to digest this agreement and negotiate it to her satisfaction. As you can see, this is totally unfair to the wife, and the court did not enforce it.
What can you learn from this case? Negotiating a prenup to create a fair and balanced prenup is crucial. Had the wife had sufficient time to negotiate to a level of satisfaction, there may have been a different outcome here. Maybe if she had negotiated that she should receive a lump sum payment to equalize the wealth discrepancy between the couple and balance out her time spent at home with the children, the court would’ve said this prenup was good.
A court found this prenup fair, even though the wife argued it was unfair!
A husband and wife were married twice and divorced twice. In their second divorce, the wife argued that the prenup was unfair and it should be thrown out. She insisted that the circumstances had changed so drastically from the signing of the prenup to the divorce proceedings that it should be deemed unfair! She explained that her husband’s net worth had grown substantially, over $24 million more. She also never pursued a career of her own because she was a homemaker. The result? The court said, “too bad, so sad!” This contract is fair. Even though there was a great disparity in finances between the husband and wife, she was not suffering. She was set to receive $650,000, a car, furniture, personal items, and potentially even alimony from her ex-husband.
Lack of negotiation leads to catastrophe
This case from Washington in 2007 is proof in the pudding that negotiation is vital to the foundation of a prenup. A couple with a great wealth disparity (husband’s net worth was $25 million and wife’s net worth was $38,000) signed a prenup that restricted the wife from joint property accumulated during the marriage. The wife also worked for her husband’s business and contributed to its successes, but she was not allowed to reap any of the benefits and increase in value of the said business. Why? Because it was listed as his separate property in the prenup. On top of that, the prenup stated the following: (1) that she was not granted any type of reimbursement for her work on his business, (2) she was not entitled to any alimony (i.e., maintenance) even if they stayed married for 20 years, and (3) she was not granted any inheritance rights should the husband die. In addition, the court noted that the wife did not have sufficient ability to negotiate the prenup to a level the court deemed fair.
Moral of the story? Negotiation, negotiation, negotiation. Had the wife had sufficient ability to negotiate the prenup, she may have been able to voice her concerns and needs. As a result, the prenup probably would’ve been a lot more balanced and, most importantly, enforceable!
Talking to your partner
Now that you are informed of the importance of negotiation in the prenup process, and you’ve read real-life case law on negotiations and unfair prenups, you can have an educated discussion with your partner.
First order of business: explain to them how the prenup can be thrown out if it’s not fair. A court could potentially even see the lack of negotiation as a factor in determining its unfairness. This is your strongest leverage because your partner obviously wants this prenup to stand. And if they want this prenup to stand, their best bet is to compromise and allow negotiation. You can show them this visual:
No negotiation = unfair prenup = invalid prenup = prenup in trash
If they still don’t believe you, show them the case law in the section above! It’s real people getting their prenup thrown out based on unfairness and lack of sufficient negotiation.
If all of that doesn’t convince them, you may need to rethink your marriage in general. If they won’t budge on certain financial topics, what makes you think they’ll budge on anything else in life?
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]