A prenuptial agreement, or prenup, is a legally binding agreement you enter into with your significant other before heading into your legal union. It outlines what each person brings into the relationship and helps with future financial planning and well-being. Most prenuptial agreements help build a strong financial foundation with your partner based on shared goals. 

As you learn how prenups work, be sure to utilize the resources provided by Neptune to help you create a custom agreement that protects you. Whether you have a question or want help with a lawyer recommendation, we can help you navigate this process with ease.

How a Prenup Works

A prenup is a versatile tool that provides you with the ability to create specific decisions important to you and your partner. However, there are laws in each state about:

• What must be done to create a prenup
• How to structure a prenup
• Limitations and exclusions
• Specific processes
• Clarifications and statements about what you own

That’s why it’s a good idea to use Neptune’s resources to help you navigate the specific prenup laws in your state. The following information is an overall guide to what happens when you put these tools into place.

Outline Your Assets

Your prenup requires full disclosure. Each of you needs to catalog your assets and disclose them within the document. That includes:

• Personal property that’s valued, such as furniture or collectible art
• Investments you have, including stocks and bonds
• Education and retirement funds you have
• Cash and bank accounts
• Real estate
• Debts of all types
• Income of all types

The details are important here. The objective is to make sure there’s open communication about what you own and owe heading into the relationship.

Outline Allocation of Assets

Martial property refers to any property or investments obtained during the union. Each state defines martial property a bit differently. Your prenup must address that. Prenups may be able to circumvent some of the state-specific rules about the division of marital property. 

Remember, your prenup is a great time to openly communicate about the finances in your relationship, and it’s always best to start this conversation early. That way, you can work with your partner to find a solution that works for both of you in the future. 

Outline Lifestyle Clauses

Some prenups allow for lifestyle clauses. These are clauses that provide insight into non-monetary assets. That could include things like vacations or fidelity. Not all states allow them. Some states do limit the types of lifestyle inclusions possible. Be sure to know what specific rules apply in your area. Neptune’s tools can help you to minimize the risk of making statements within the prenup that could limit its validity later.

How to Ensure Your Prenup Works: Creating a Valid Prenup

One of the most important parts of creating a prenup is ensuring it will be upheld if necessary at some point in the future. This is called ensuring the validity of the prenup.

Basic prenup templates exist but they seldom address your specific goals and needs for a strong financial future with your partner. Working with a qualified family lawyer through Neptune will help you navigate difficult conversations with your partner, make sure the correct questions are addressed and build a prenup that is customized to your needs. 

Both parties could agree to the same terms as most other people. Other times, you both have specific needs and desires you wish to fulfill within this agreement. In all situations, consider the following steps to ensure your prenup works the way you desire:

• Know the laws in your state. That includes exclusions and limitations on how prenups can function.
• Ensure the prenup is clear and written to be proactive and build a solid financial foundation. It should outline the specific goals and why they are important to your relationship.
• Draft an agreement you both benefit from in some way. A prenup pledges that you will maintain good faith and open communication throughout your partnership. It is a tool you can use for mutual respect and understanding regarding your financial matters and shows your commitment to fairness. 

Having two attorneys, one for each party, helps to demonstrate the fairness of the prenup because judges can see that both parties had an attorney representing them in the process. One of the more common reasons the court strikes down a prenup is because there was only one lawyer involved. 

When a Prenup Works

It’s a good idea to consider the value of using a prenup in a variety of situations. You don’t have to have a reason to do so. Prenups are beneficial to most relationships heading into more serious ground. They offer clarity and insight into the expectations of each party and are a tool you can use for financial planning. 

There are some situations in which creating a prenup could be very helpful. Examples of this include:

• Passing Property through Generations: Many times, a prenup is a tool that safeguards family assets. That could include, for example, a family estate that passes from one generation to the next over time.
• Financial Rights Clarification: Whether or not you have children or specific assets being brought into the relationship, prenups work to outline your future financial goals. 
• Minimizing the Risk of Arguments: Prenups work to provide you and your partner the opportunity to openly communicate about your future and be more proactive when it comes to how you build a solid financial foundation. 

How a Prenup Works for You

If you and your partner are thinking about the future, it’s a good time to find out how a prenup works in your state. You can complete the process and get the information you need using Neptune’s 3-step process. We can match you with a vetted attorney who can minimize the risk of communication issues and provide you with clarity on your rights.

Creating a prenup that aligns with your shared financial goals is a proactive way to take your relationship in a positive direction. It doesn’t have to be overwhelming. We can help you and your partner build a solid foundation for your relationship that addresses your current and future needs. We can help you both get on the same page so you are better prepared for whatever life may throw at you.

Contact Neptune today to get started and go over your options.