A prenup protects you and your other half, including finances and assets you both own before getting married. Also, it clearly outlines how financial matters are managed throughout the relationship. As prenups become more widely accepted, more couples use them to design their financial future. Contrary to common misconceptions, getting a prenup doesn’t mean a lack of trust or faith in the relationship.

Instead, a prenup is a smart way to plan your future, especially as it relates to financial matters in your partnership. The agreement specifies how financial matters are handled during the union and spells out what happens to your assets, property, and money if there is a life-changing event.

While a prenup seems like a straightforward agreement, the details can be tricky. It is usually best to consult an attorney if you plan to draft one. That’s where Neptune comes in. We can help guide you in the right direction and connect you with vetted family law attorneys with extensive experience in crafting legally valid prenuptial agreements.

Take this quiz to get started.

What Is a Prenup?

A prenup is a legally binding agreement between a couple who plan to get married. It lays out how the couple will handle their assets, debts, and various financial matters throughout their relationship.

With an agreement in place, you and your partner are clear on your responsibilities regarding finances. If one or both of you are coming into the relationship with debts―such as student loans or credit card debts―the agreement helps define how you’ll manage them.

To be clear, a prenup is not a “yours-versus-mine” type of agreement, and it certainly isn’t solely about the potential end of the relationship. Instead, a properly drafted prenuptial agreement serves both of your interests. 

It encourages honest discussions about financial goals and any concerns you might have about money. Having these types of conversations with each other can actually lead to better understanding and strengthen your relationship.

How Does a Prenup Define Ownership of Property and Finances?

If your partner brings up a prenup, you might wonder whether it’s a good idea to get one. Actually, a prenup can be beneficial for both of you, especially if it is well-drafted to meet the needs of you both. 

A prenup allows you to define what property and assets will remain separate and which ones will be considered marital property, regardless of your marital status. This way, your premarital assets remain yours if something changes in the future.

You can even include specific terms in a prenup that explain what each person gets from marital property. Let’s assume your partner plans to move into your home after the wedding so that you own it together. You can craft the prenup to state that any increase in the value of the home during the union will be divided equally, while the original purchase price belongs to you.  

For example, let’s say you bought the home for $300,000 before getting married and later sold it for $400,000; only $100,000 will be divided between you and your partner. Keep in mind that these terms also have to agree with state laws, so it’s important to consult an attorney who knows the local laws in your area and can explain everything to you and your partner.

What Does a Prenup Cover?

Beyond property rights and dividing assets, a prenup can include several guidelines about your life together as spouses, particularly as it has to do with financial matters. Here are four key things a prenup covers:

1. Interests of Your Dependents

With a prenup, you and your partner can set aside certain assets for your dependents, and these will not be considered marital property. This smart financial strategy is especially helpful if you or your partner have children from previous relationships.

2. Inheritances

If you expect to receive an inheritance or substantial financial gift, and you plan to keep it as a separate asset, a prenup can make that happen. The agreement can ensure the inheritance doesn’t become part of marital assets.

3. Spousal Support

A prenup can address alimony if things don’t work out and your relationship ends legally. The terms of your prenup can specify a minimum amount that will be paid as spousal support. You might even waive your rights to spousal support, provided both of you agree.

4. Debts

Full financial disclosure is an important part of prenuptial agreements. When you enter into a spousal relationship with a complete understanding of each other’s financial situation, it helps clarify who is responsible for which financial obligations. If one or both of you have significant debts, the agreement ensures that you’re on the same page regarding who gets to pay off the debt.

What Isn’t Covered in a Prenup?

Prenups have some limitations regarding what they can cover. A few of these include:

• Child Custody and Support: Any terms about child custody or support in a prenup are not legally binding. That is because courts will always make decisions based on what’s in the best interest of the child at the time of separation.
• Unfair Terms: Courts may reject a prenup, which includes terms that favor mainly one partner. For example, the agreement may be thrown out if it gives one spouse most of the marital property without justification.
• Personal Matters: Prenups typically focus on financial matters, so personal preferences or non-financial arrangements, like vacation plans and household chores, are not covered.
• Provisions that Encourage Separation: Courts will not uphold any terms in a prenup that encourage either partner to end the relationship. The reason for this is simple: it goes against the policy that promotes marital bonds.

Neptune Can Help With Your Prenup

A legally sound prenuptial agreement is a powerful planning tool for couples, especially those looking to secure their financial future together. With Neptune, you and your partner can start the prenup process with a free chat. If you decide a prenup is right for you after the initial chat, we will connect you with a family law attorney to help you draft a solid agreement. 

Click here to get started.