In this episode: Prenups and postnups can settle “who gets what” long before anyone thinks about divorce. Jon Peyton explains what each agreement is, when couples sign them, and works through seven common myths, from “a prenup dooms the marriage” to “courts don’t enforce them.”
Key insights
- A prenup is a contract signed before marriage, and a postnup is one signed after. Either can cover how you’ll live during the marriage, not only what happens if it ends.
- Signing one isn’t planning to fail. It turns the commitments you’re making into a contract while you’re both on good terms.
- Prenups aren’t only for the wealthy. Agreeing on terms in advance can reduce conflict and legal fees later.
- Without one, your state’s law effectively acts as your prenup, and moving to another state can change the rules.
- Enforcement varies by state. Terms that are extreme or plainly one-sided are the most likely to be challenged.
Episode timeline
- 0:00 Introduction
- 1:10 What prenups and postnups are
- 3:17 When a prenup comes into play
- 4:50 Myth one: a prenup dooms the marriage
- 6:46 What a postnup is
- 9:08 Myth two: prenups are only for the wealthy
- 9:56 What a contested divorce can cost
- 13:14 Myth three: prenups are unfair
- 18:14 Myth four: prenups cost too much
- 22:06 Myth five: few people have one
- 24:33 Myth six: prenups are only about divorce
- 26:35 Myth seven: courts don’t enforce them
- 32:13 No prenup? Take a measured approach
- 33:48 One step at a time
The episode in brief
Two kinds of contract. A prenuptial agreement is signed before the wedding, a postnuptial agreement after. Either can cover almost anything: alimony, children, assets, even the dog. It can also set expectations for the marriage itself. Whether every clause would be enforced is another matter.
When each one fits. A prenup usually comes up between the engagement and the wedding, when both people are happy and can agree on finances, children and more from a place of goodwill. A postnup fits couples who’ve already built a life, children or a business together and want to put their commitments in writing while things are going well.
Myth one: a prenup dooms the marriage. Wedding vows are a promise. A prenup turns some of those promises into a contract. If the agreement is broken, it may give the other spouse grounds to end the marriage on terms already agreed.
Myth two: only the wealthy need one. A few years before this recording, Jon saw a contested divorce cost $19,000 to $22,000 on average across both spouses. Agreeing in advance on the house, the cars, the dog and the parenting schedule can cut down the arguing, and the bills. Families with wealth may also want a prenup so that money passed to their child stays the child’s.
Myth three: prenups are unfair. Fairness depends on how the agreement was written. Jon gives the example of a spouse who stays home with the children while the other builds significant wealth. If the prenup leaves the at-home spouse with nothing, a judge may decline to enforce it or modify it. Courts tend to uphold agreements when each side had its own attorney and negotiated the terms.
Myth four: they cost too much. A simple prenup might cost around $2,500, more if there’s a lot to negotiate, and celebrities with complex holdings can spend tens of thousands. Couples who work out the terms at the kitchen table first and use attorneys to draft and review keep costs lower. Compared with a contested divorce, it’s usually small dollars up front to save bigger dollars later.
Myth five: few people have one. In effect, everyone does. Your state’s law already says how assets, alimony and child support are divided. Community property states may split assets 50/50, while equitable distribution states aim for what’s fair. If you move, the rules may change. Writing your own agreement replaces the default with terms you chose.
Myth six: they’re only about divorce. A prenup can also cover commitments during the marriage, such as one spouse staying home with the children for their first several years, with a dissolution clause for what happens if things don’t work out.
Myth seven: courts don’t enforce them. It depends on the state, and sometimes on the court. Jon describes a past client in a state where judges looked at prenups skeptically. Courts may scrutinize terms more closely, and extreme or plainly one-sided terms are the most vulnerable. Work with a qualified family law attorney who knows how agreements fare where you live.
No prenup isn’t the end of the world. It means approaching the divorce more carefully. Without agreed terms, you’ll be negotiating assets and children during an emotional time, and every extra round through the attorneys adds to the bill.
One step at a time. Focus on the step in front of you, then the next.
Key action items
- Learn your state’s default rules. Ask an attorney whether your state uses community property or equitable distribution, and what that would mean for you.
- Talk terms through together first. If you’re considering a prenup or postnup, discuss finances, children and expectations before going to attorneys.
- Each get your own attorney. Separate counsel for each spouse makes an agreement more likely to hold up.
- Keep terms reasonable. Ask your attorney which provisions courts in your state tend to question.
- Review it after big changes, such as a move to another state, a new business or children.
Listen next: Episode 3: To Fight or Not to Fight? The Cost of Divorce
This episode is educational and isn’t legal, tax or financial advice. Speak with your own attorney and advisers about your situation.