Let’s set the record straight; if done correctly, prenups can “work” and work amazingly to your benefit. However, there are some situations when prenups don’t work, like when they are not state compliant, or they leave one person destitute. They may also simply not work; in your opinion, because you signed a contract you weren’t comfortable with. There are a few reasons why a prenup may not work, so let’s dive in.
It’s Not State Compliant
Each state lays out the requirements for a prenup to be considered valid and enforceable. The requirements are typically things like: must be in writing, must be signed by both parties and must be notarized. But they can also include other unique requirements, like the 7-day rule in California. Remember, every state has its own requirements, so what may be required in California isn’t necessarily required in Minnesota (and vice versa).
Typically, here are some of the most commonly used requirements across different states:
- Prenup must be in writing
- Prenup must be signed by both spouses
- Prenup must be notarized
- Prenup must be witnessed by one or two witnesses (this one is less common)
- Prenup must include some level of financial disclosure
- Prenup must be signed voluntarily (not under some form of force)
- Prenup must be conscionable (that means it must be reasonable, but that doesn’t necessarily mean 50/50)
Then, each state also lays out what you can and cannot include in a prenup. For example, most states allow you to include provisions about alimony in your prenup. But New Mexico does not allow this. Another example is nearly all states do not allow you to include child matters (support and custody) in a prenup, with the exception of New York, which allows it in narrow circumstances. Other states, like California, have strict regulations around certain topics like alimony. In California, if you alter spousal support (i.e., alimony) in your prenup, you are then REQUIRED to hire legal representation. If you leave alimony alone in your prenup, you can waive your right to a lawyer.
What happens if you don’t follow your state requirements? If you do not meet your state’s requirements for a valid and enforceable prenup, your prenup will get thrown out, or certain clauses will be stricken.
For example, let’s say you are in a state that requires witnesses to a prenup, like Minnesota. If you do not have witnesses sign your prenup, there’s a very good chance that the judge will throw out the prenup altogether. This means your divorce will go by the rules of the state, which may not be to your liking.
Another example would be if you lived in New Mexico and included a provision about alimony, even though it is not allowed there. The court may strike the clause (meaning ignore it), or they could even throw out your prenup altogether.
The bottom line is that rules around prenups are dictated by your state. If you don’t follow your state rules, you risk throwing your prenup out. If your prenup is in the metaphorical trash, it doesn’t really “work,” does it??
It Wasn’t Signed Voluntarily
A very common requirement across virtually all states is voluntariness. A court doesn’t want to enforce a contract into which one person was forced into. What does vary from state to state is what is considered voluntary. For example, one state may say that introducing the prenup to your spouse too close to the wedding day is enough to say it wasn’t signed voluntarily because the spouse felt too much pressure to sign it, given their wedding day was so close. Whereas another state may NOT consider this to be involuntary, and they would say they could’ve canceled the wedding.
The bottom line is that you nor your partner should be forced into signing any contract, let alone a prenup. If you or your partner is forced to sign a prenup, it may get thrown out. If it’s thrown out=it doesn’t work!
Another commonly used requirement across many states is unconscionability. Again, what one state considers unconscionable isn’t necessarily the same for every state. For example, one state may say that when one person walks away with millions, and the other walks away with zero, it would be considered unconscionable. Another state may disagree and say only if the person was required to go on public assistance. It really depends on the situation and the state.
At the end of the day, your prenup should benefit both people in some way, shape, or form. This doesn’t necessarily mean 50/50, but one person should not be walking away from the marriage destitute while the other sails off in a yacht. If it’s unconscionable, it’s going to be thrown out in most states. A prenup in the trash is no prenup at all!
It Lacks Proper Financial Disclosure
Virtually all states require some level of financial disclosure (although a few states will allow you to waive it if you do it properly). Financial disclosure simply means including a financial schedule to your prenup with a list of all of your finances, including assets, liabilities, businesses, and future inheritances. You cannot and should not leave ANYTHING out here; otherwise, you risk getting your prenup thrown out.
Why does financial disclosure matter? Well, in order to properly negotiate a contract, you need to understand what rights you’re giving up. If you have no idea that your partner has a future $500 million inheritance or a $5 million business, how can you intelligently waive your right to those things? In other words, if you agree to give up your right to their property, you need to KNOW what that property is in the first place. A prenup doesn’t really work if you don’t know what assets and debts your spouse has or will have in the future.
It Wasn’t Negotiated To Your Satisfaction
This one is less about state law and more about your preferences. If you sign a prenup that you don’t like, but you do it anyway, the prenup isn’t really “working” for you, is it? No! That’s why negotiating your prenup to an acceptable level to you is extremely important! You may not think it’s a problem now because you’ll never get divorced, but with the divorce rate constantly hovering around 50%, you’re basically tossing a coin.
Let’s play out how this scenario might look in real life. Henry and Hannah are engaged to be married. Henry wants to get a prenup in place because he is extremely wealthy. Hannah has no money to her name and makes a very low income. Hannah agrees to sign a prenup because she doesn’t want to seem like a gold digger. She also doesn’t want to negotiate any terms to her liking because she feels like that will make her come off as greedy or like she’s only in it for the money, and it’s simply not true! She loves Henry, and she wants to prove it! They sign the prenup, and Hannah isn’t entirely comfortable with it, but she does it anyway. They live happily ever after…for several years. Until Henry ends up cheating on her. Hannah has now given up her career to be a stay-at-home parent to their two children and has no money. She’s now deeply regretting her choices regarding the prenup she signed years prior. The result? The prenup doesn’t really “work” for her because the terms weren’t negotiated to her liking simply because she didn’t want to rock the boat or appear greedy.
The bottom line is that your prenup needs to work for you. You need to negotiate it to a level that you feel meets your needs. It should be fair and balanced, so your partner should also feel they are benefitting from the prenup in some way, too. If you don’t negotiate your prenup, your prenup won’t work in the event of a divorce.
How To Make Your Prenup Work For You
Now that you see the ways a prenup may end up not working let’s talk about the ways you can make your prenup work in just two simple steps.
Step 1: Make sure you use a state-compliant platform like HelloPrenup or hire a lawyer.
Making sure you create a valid and enforceable prenup is number one to making your prenup work. If your prenup is invalid, you don’t have a prenup. You have a piece of paper that doesn’t protect you.
Things like proper financial disclosure, not including unconscionable terms, and entering into the prenup voluntarily are crucial here. They are state-mandated requirements, and most states will throw out your prenup if you don’t follow their guidelines on these topics.
Step 2: Make sure you negotiate the prenup to your liking.
Don’t just settle. Make sure your needs are met, and your voice is heard in the prenup-making process. It may feel like you’re being greedy or heartless, but we can tell you this: you won’t be thinking that way if you ever find yourself in a courtroom for divorce.
A huge part of making your prenup work is including clauses that benefit you! And remember, a prenup can benefit both people at once, which is where a little healthy negotiation comes in.
The Bottom Line
Prenups work. There just may be some situations where they don’t work, but those can be easily prevented, as you can see above. Make sure you follow the laws of your state and negotiate your prenup to your satisfaction, and you will be all set.
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]