Prenuptial agreements: Who needs one and why

Marriage means the joining of assets and here's how prenups can protect them

Prenuptial agreements aren’t just documents reserved for the ultra-rich or famous. The average person is increasingly looking at this piece of legal paperwork to protect themselves and their assets from a messy divorce. In a recent survey conducted by the American Academy of Matrimonial Lawyers, 62 percent of divorce attorneys reported an increase in the number of clients they had requesting a prenup.

With prenups becoming more common, FOX Business consulted legal experts to find out who really needs a prenup and why it is worth looking into.

If You Come From Money

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It’s a no-brainer that prenups are a popular option for couples who come from well-to-do families. Particularly, prenups tend to be a fit for those “who are often under pressure from their families of origin to protect their inheritance or expected inheritance,” according to Katherine Miller, founder of Miller Law Group.

Miller noted that wealth-generating family businesses are more likely to be a catalyst for prenups.


If You Plan to Start or Have a Business

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As a money-focused agreement, it’s not uncommon for marrying couples to be business-minded. For this reason, prenups are a great option for parties who ambitious business endeavors, according to Miller. Whether the business is in-progress or has already been started, a prenup is one way to protect assets before saying “I do.”

“Sometimes, this involves a startup that may have no value at the time of the marriage but that may turn into the next Amazon or Facebook. Sometimes, a person already has millions in their 401k. Either way, they wish to make sure these assets remain protected in the event of a future divorce,” Miller said. “It is always a good idea to discuss the couple’s expectations around money before the marriage.”


She added: “Many of my very wealthy divorce clients tell me that they don’t have a prenup because the only thing they had when they got married was debt. [But,] I think a prenup is a good idea when either or both people have ambitions to start a business or work in a well-paid industry. Imagine if Jeff Bezos had thought of a prenup.”

If You Have Kids to Protect

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Not every marriage is the first marriage and sometimes that means children are a part of the financial equation. For this reason, Miller said, “People who have been married before and who have children from prior relationships and want to protect those children’s inheritance.”

In the case of a divorce or unexpected passing, a clear outline of which assets belong to the children will add a layer of protection that stands up in court much similar to a trust.


“It is impermissible to dictate child support for unborn children,” she added.

You Need Security In Case of Death


“All marriages come to an end either by death or divorce and one advantage of a prenuptial agreement is that it can and should simplify the unwinding process when that end comes,” said Miller.

If the former is the one to happen, the spouse who has a lesser income could benefit from the added protection a prenup provides.

“A prenup spells out what the non-monied spouse would be entitled to in the event of a divorce or death,” Erin Ardleigh, the founder and president at Dynama Insurance, told FOX Business. “If a person is part of a wealthy family, most likely their wealth is already protected through trusts and other structures. It would be difficult for the non-monied spouse to pierce through those protections.”


She added: “If the monied spouse passes away, the wealth might skip over the survivor and pass to their children, leaving the non-monied spouse dependent on their children's generosity.”

Ardleigh also advises couples seeking prenups to “take out a life insurance policy that would provide liquidity if the monied spouse predeceased them” because in many cases the “new spouse isn't immediately (or ever) written into the family's estate plan.”

You Don’t Want a Long Drawn-Out Divorce

Divorce concept

Although it may be counterintuitive for couples who are prepping for marriage to think about divorce, prenups are meant for making a potential parting less stressful. According to Miller, these documents are mainly used to deal with the division of assets or alimony upon divorce.

“Unlike superstition or people who are against prenups, a prenup is not dooming your relationship but is more likely to help plan for the future in an unlikely event that the marriage ends,” Leslie Tayne, the founder and head attorney at Tayne Law Group. “In these cases, the prenup acts like an insurance policy that protects both individuals’ financial assets should things not work out between them in the long haul.”


“If things work out in the new marriage, then there is nothing to worry about. While no one wants to plan for a breakup, it's always better to discuss the matter while things are going well in your relationship and when you're taking on the debt,” Tayne added. “You don't need to have a lot of money or assets to utilize these types of agreements, and they can help to make sure everyone understands who is responsible for what.”