5 steps to consider when creating a prenup

Personal legacy planning5 steps to consider when creating a prenup

May 4, 2021

Key things to know

  • Establishing the value and purpose of a prenuptial agreement can alleviate the stress and emotion surrounding it.

  • Include it as part of your overall financial planning and wealth discussions.

  • Make sure you and your fiancé have an equal voice and representation when it comes to deciding the terms of the prenup and signing the agreement.

Getting engaged is typically a time of joy and excitement. However, this joy and excitement is often accompanied by feelings of anxiety and apprehension. These opposing emotions stem from the unknown and an innate desire to protect yourself. You don’t want to get hurt by someone you love, nor do you want to hurt them. You want to believe the two of you as partners will have each other’s’ best interests at heart for years to come.

Couples nearing marriage often confront challenging questions and must make difficult decisions around complex, emotionally charged issues. Some of these decisions can be difficult to sort through individually, much less discuss with your partner.

  • Will you each keep your own name, will one of you take the other’s last name, or will you hyphenate the two names?
  • What religious rituals or routines will be practiced? Which family gatherings will be attended? How will holidays be spent?
  • What about having children? If children are already in the picture, how is your blended family going to work?

And, of course, there are financial decisions to make.

  • Will you keep your money separate? Combine everything or just a portion from each account? Who will manage it? How will you both be involved?
  • Who will have access to what? Who will make investment decisions?
  • Who will pay the bills? What constitutes spending too much? What are you both allowed to spend on what?

Somewhere in the process of sorting out financial and estate planning decisions, the question may emerge, “Should we have a prenuptial agreement?” Deciding whether to complete a prenuptial agreement can be tricky. Here are steps that you and your families may find helpful in making the prenup experience more successful.

1. Establish the value

A great misconception of prenups is that they relate to the level of love and trust (or lack thereof) between a couple. A prenup isn’t about love or trust. Instead, it represents a need for peace of mind, fueled by a fear of the unknown. In this case, the unknown being how the marriage will end, be it death or divorce.

There’s comfort in knowing where and how assets will be preserved and distributed after you’re gone. If the vision is for assets to stay within your immediate family, a prenup provides assurance that assets will stay there. If assets were meant for educational purposes for future generations, a prenup will help retain that vision. If a closely held family business is involved, the stakes are even higher.

A prenup is a means of achieving peace of mind and, in a sense, controlled comfort over the unknown.

2. Understand the purpose

Prenups cover two primary areas: property and support in case of death or divorce. How will property be divided and how will support and/or support payments be made?

Each party needs to have a clear understanding of the prenup’s purposes:

  • Are you protecting family assets that have been around for generations?
  • Do you see these assets as the family’s and not your own?
  • Are you protecting company stock ownership?
  • Are you entering a blended family relationship where you want to designate how assets will be divided amongst the two families, ensuring your children and your new spouse are taken care of in a way that is meaningful to both of you?
  • Do you have a mission, purpose or vision that aligns your personal values with how you want your assets allocated?
  • Is your level of wealth and your fiancé’s significantly different?
  • Do you want to outline how your new spouse should be taken care of should something happen to you?
  • Are you clarifying what spousal support and/or support payments would look like? (A prenup does not address children or child support.)

Let’s look at a few examples of a prenup’s purpose in action.

Blending families

In blended family situations, especially when adult stepchildren are involved, prenuptials are often useful to clarify your wishes for how you’d like your children and your new spouse to be taken care of after your death. Your fiancé may fear that should something happen to you, all money and assets would go to your children, leaving them and their children with nothing. Children often fear the opposite, that the new spouse will receive all the assets and the previous promises will be forgotten.

You can provide comfort to all by discussing expectations, sharing your plan and highlighting how you’d like to take care of your new spouse and your children. You might agree to adjust your plans the longer you’re married. Provisions in the document can allow flexibility or even renegotiation, phase-ins or a sunset provision after a period of years.

State defaults

Another purpose of a prenup is to preempt a state’s defaults. In a sense, there’s always a prenup of sorts in effect, based on your state’s defaults around marriage. By doing a prenup, you are deliberately and consciously making premarital decisions about the eventual division of your assets after the marriage, rather than leaving this to the state to decide for you.

Before you start on the prenup path, you should know your state’s default rules and what you’re negotiating or preventing at the state’s level. It’s often assumed that having a trust will protect all ownership of assets; however, once a distribution is made, it’s no longer protected by the trust. Signing a prenup is a deliberate and conscious decision before marriage about how these distributions will be divided.

Family governance

If your parents or the family’s governance system requires a prenup, find out why your family put such a policy in place and what values it supports. Seeking to understand and hear your family’s stories will help you and your fiancé support and stand behind the requirement.

Learning that a prenup is part of an overall family policy can take away some of the sting and help it not feel quite as personal. The requirement of a prenup can also open further conversations about what it means to be a part of a family with a business. Introducing your fiancé to other in-laws in the family and having a transparent conversation about overt and covert expectations of family members who are born into the family versus those who marry into the family can help to illuminate and normalize the whole process. And if you’re the first couple of your generation to get married, then you get to set the standard for the siblings and/or cousins that will be following your lead.

3. Timing is everything

A prenup is best discussed, delivered and executed months before the wedding date. Some states will not recognize a prenup signed too close to the day of the wedding.

The prenup conversation should allow adequate time for multiple discussions and negotiations. Also, attorneys may not be on the same expedited schedule as you. Allow time to seek mutual agreement and understanding. When it comes to negotiating prenups, the further in advance of the wedding, the better.

4. Consider your approach

It can help reduce the stress of signing a prenup if you position it as a discussion of what will happen upon the death of a spouse, rather than just a discussion about divorce. Again, a prenup is meant to provide comfort, not fear and doubt. Take this opportunity to be transparent about why and how you want to approach the prenup agreement.

When discussing the terms of the prenup, here are some things to consider:

  • Both sides must have an equal voice.
  • Both sides must have representation and complete disclosure.
  • Both sides should be fair and willing to negotiate.
  • Both sides should sign a prenup, no matter the size or inequity of the assets.
  • You may choose to use a professional mediator (one party that works with both to come up with a solution) and then give the points or draft document to separate attorneys.
  • The wealthier fiancé may consider making a gift to cover the other fiancé’s legal fees rather than paying them directly.
  • You may choose to have provisions in the document that allow flexibility or even renegotiation, phase-ins or a sunset provision after a period of years.

Appropriate legal representation is an integral part of the approach to successful prenups. Some states will not recognize or enforce a prenup if proper representation was not present on both sides. Additionally, lack of representation may support a challenge later.

A prenup is a means of achieving peace of mind and, in a sense, controlled comfort over the unknown.

Legal representation for both parties allows the lawyers to conduct the negotiations. The lawyers become the intermediary on each person’s behalf, allowing the couple to depersonalize the process. When selecting lawyers, seek out good negotiators and estate planners, ones that look out for the best interest of the couple, and ones with a high degree of emotional intelligence. Remember, your attorneys are working for you, and you can set the tone with them right at the beginning so that they treat each of you as a couple who intend to be together until death do you part – and NOT as adversaries to be protected from right at the start.

5. Communication is key

Talking with your fiancé about putting a prenup in place is critical to its overall success. While you may be looking for comfort with a prenup, knowing that you’re both going to be “taken care of” financially, it’s equally important to take care of each other emotionally throughout the process.

When done well, prenup conversations can enhance mutual support and understanding. Consider these strategies for productive conversations:

  • Make time for each of you to express your concerns and wishes in a supportive, non-legal conversation in which plenty of discussion can occur.
  • Be open and curious and take care to not be defensive or reactive. This is a conversation for relationship first and foremost, not about agreement.
  • Do check-ins to be sure you understand each other’s perspectives. Repeat back so each of you can hear what your goals and hopes and concerns sound like.
  • Create a safe environment where each of you can clarify your message and come to a mutual understanding or, better yet, eventual agreement.
  • It’s a good idea to keep the use of alcohol during these conversations to a minimum so that you can be present. Enjoy a bottle of wine or crack a few beers afterwards.

The prenup shouldn’t be the focal point of your financial discussions. Rather, place it within a larger conversation of the other kinds of financial planning and wealth discussions you need to have with each other. This would be a time for full disclosure about assets, debts, income, resources, attitudes and philosophies about money. With larger families with significant holdings, it can be meaningful to have the parents of both parties involved in a larger conversation about assets. Open and honest discussion about difficult topics such as money and estate planning early in the relationship can set a foundation for good communication and relating for years to come.


The decision to implement a prenuptial agreement is a personal one. Should you decide to move forward, the steps outlined above may help you successfully execute a prenup and potentially avoid some fatal flaws. There’s no guarantee that taking these steps will prevent a future problem, but they may help you more efficiently work through it.

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