How Does a Prenup Work? What You Should Know

Think of a prenuptial agreement as a blueprint for your financial future with your partner. Officially, a prenuptial agreement, or prenup, is a legally binding agreement you and your partner create before getting married. It outlines specifics such as what assets you each have and helps you plan a strong future based on shared financial goals. The bottom line is that prenups allow two people in a serious relationship to have an open conversation about finances, values, and the goals they have in mind for their future.

As you learn how prenups work, know that Neptune is here to help. Neptune is the financial concierge that wealth-building couples trust to lay the foundation for their shared future, starting with prenups. By combining emotionally-intelligent AI, vetted legal experts, and transparent flat-fee pricing, Neptune creates financial alignment, transforming a traditionally tense process into a relationship-strengthening experience.

How a Prenup Works

Before you get too far, you should know that there are state-specific laws 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 prenup laws in your state.

Outline Your Assets

In your prenup, each of you needs to list your assets. 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 goal is to make sure there’s clarity and open communication about what you own and owe.

Outline Allocation of Assets

In the process of creating a prenup, you're bound to hear the term 'martial property'. It refers to any property or investments a couple acquires during a marriage. Each state defines martial property a bit differently. Your prenup must address that.

Remember, your prenup is an opportunity to openly communicate about finances with your partner. The earlier you have this conversation, the stronger your future will be.

Outline Lifestyle Clauses

Some prenups also allow for lifestyle clauses. These are clauses that provide insight into non-monetary assets. That could include things such as vacations. However, not all states allow these clauses, and some states do limit the types of lifestyle inclusions.

How to Ensure Your Prenup Works: Creating a Valid Prenup

One of the most important parts of creating a prenup is making sure 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. 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. 

Also, to make sure your prenup works for you and your partner, you should:

• 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 for financial matters and shows your commitment to fairness. 

It's best practice to hire two lawyers for your prenup, one for each of you. There’s no point in doing a prenup if it gets struck down by courts. And one of the most common reasons for prenups to get struck down is because only one lawyer was involved.

When a Prenup Works

If you’re going back and forth on whether a prenup is right for your situation, know that prenups are especially beneficial for the following situations.

• Financial Rights Clarification: Remember, prenups work to outline your future financial goals. 
• Passing Property through Generations: Many times, a prenup helps clarify the future of family assets. That could include, for example, a family estate that passes from one generation to the next over time.
• Minimizing the Risk of Arguments: Prenups work to help both of you openly communicate about your future and be more proactive about building a solid financial foundation. 

How a Prenup Works for You

Prenups are foundational decisions that you need to get right, without the pressure of time and emotions.

Neptune transforms what's typically a lengthy, stressful process into a structured experience that respects your timeline without compromising on quality.

Starting the conversation with Neptune gives you the time to make thoughtful decisions rather than rushed ones, ensures you have access to top-tier legal expertise for your situation and jurisdiction, and transforms what could be a last-minute source of tension into a foundation-building opportunity.

More importantly, you set your relationship, and finances up for success. Because when the stakes are high, high standards aren’t a luxury. They’re a necessity.

Connect with Neptune today.