Prenups are only considered legally binding when they meet certain requirements. These legal agreements outline the financial responsibilities and what each partner can expect from one another. With prenuptial agreements becoming more popular, a lot of couples are curious about whether they actually hold up in court. They can definitely offer a solid financial foundation, but it really comes down to how well they are drafted and whether they meet legal requirements.

The knowledge of how to make a valid prenup is therefore important to help both partners choose wisely regarding their future. Neptune is committed to helping you and your partner make the best decision regarding having a prenuptial agreement, as it makes the process easier for couples by linking these partners to vetted family law attorneys who operate in drafting legally sound and personalized agreements.

Understanding Prenuptial Agreements

A prenuptial agreement is a legal understanding between two people planning to marry. It specifies how assets, debts, and financial responsibilities will be handled during marriage and, should the marriage end, how they will be handled in the case of divorce or separation. 

In simple words, a prenup will serve as a financial blueprint that allows couples to come to a mutual agreement on their financial goals. Contrary to popular belief, prenups are not just for those with a lot of money because any couple that needs financial clarity can benefit from them as they ensure that they make logical decisions concerning their finances.

Common Reasons for Getting a Prenup

There are different reasons you may consider a prenup. The major reason couples get one is to establish financial expectations and ensure they agree on various items like business ownership or family inheritance. Prenups also help with the equitable distribution of finances and help paint a clear future of what you see for your future together. 

When discussed out of honesty, prenuptial agreements help build a strong bond between couples and steer them toward sound financial decisions.

4 Legal Requirements for a Prenup to Be Binding

There are many aspects to follow to make a prenuptial agreement legally binding. 

1. Must Be a Written Agreement

The agreement must be put in writing and signed by both of you since oral agreements are usually unenforceable. 

‍2. Must Be Out of Your Own Free Will

Secondly, the parties must enter into the agreement of their own free will without any form of coercion or duress. Another key requirement is that full and fair disclosure of each party's financial status must be paramount, including assets, debts, and obligations; any concealment can make the agreement invalid.

3. The Terms Must Be Fair and Reasonable for Both 

The terms of the agreement must also be fair and reasonable and must not unfairly bias one party, for courts generally do not look favorably on agreements that leave one spouse in desperate financial circumstances. 

4. Must Be Properly Executed

Couples should be aware that independent legal advice is not generally required but is considered best practice for both to ensure there are no conflicts of interest. The judge also likes to see separate lawyers and may choose to invalidate the prenup if this isn’t done. 

The proper execution of the agreement is very important; both parties have to sign the agreement before the wedding day according to state law regarding notarization or witness requirements.

When Can a Prenup Be Challenged?

A prenup can be challenged even when all legal requirements are fulfilled. Issues that can lead to that include lack of voluntary consent, foully imbalanced or unconscionable terms, improper legal procedures, partners hiding assets before signing prenups and if the courts deem the agreements to benefit only one partner more. 

An agreement that contains non-financial provisions, such as clauses guiding personal conduct or home-related duties, is generally considered unconscionable.

How Courts View Prenups in Different States

The ruling on the legality of a prenup may vary depending on state laws. For example:

• In California, governed by UPAA, fair disclosure and voluntary consent must exist, along with a seven-day notice to the other party and signing.
• New York will enforce prenups if they comply with execution requirements, while courts will second-guess perceived unfair terms in such agreements.
• Massachusetts adopts a two-part test: whether the prenup was fair when signed and whether its enforcement would not be seriously unfair at the time of enforcement.

Understanding state laws, in particular, becomes even the essence of validation and making a prenup enforceable thereafter.

Can a Prenup Be Updated?

It is possible to update prenups; after all, life does change. Couples can enter into a post-nuptial agreement allowing modifications or revocation of the original contract. Should your financial circumstances or personal priorities change after marriage, you would be right to adjust your agreement to maintain alignment with your common financial goals.

Get started with our postnup quiz. 

Some common reasons to revise your prenup include major financial gain or loss, birth/adoption of children, major changes in property holdings, such as the sale or purchase of property, or changes in state laws affecting prenuptial agreements. The post-nuptial agreement, known informally as a postnup, allows one to address the new realities of either spouse's circumstances.

How Neptune Can Help

The prenup process doesn’t have to be burdensome or overwhelming. If you are ready to initiate a conversation, Neptune provides expert support that helps align you and your partner on the future of your finances by providing personalized prenup consultation, few hidden costs of a flat-fee price, an introduction to highly skilled family law attorneys, a simplified process with fewer anxieties, and easy financial planning. 

A few steps must be taken to make them enforceable. Working with your partner, explaining your finances openly, and getting admissible counsel will help you create a prenup that benefits all of you in the long run. 

If you and your partner are considering a prenup, chat with Neptune and start building a good financial platform for tomorrow.