Common Myths About Prenuptial Agreements

While couples might spend months perfecting the details of their wedding and envisioning the future together, their financial lives are often the most taboo issue never broached before nuptials are exchanged despite being a fundamental aspect of any relationship down to its core.

Prenuptial agreements are a pragmatic and effective way to facilitate that conversation by enabling future spouses to share potentially fight-inducing information and positions, as well as set expectations. 

However, the premise of prenuptial agreements commonly results in reactions driven by the emotion focusing over the theoretical end of a relationship rather than their ability to avoid landmines that can blow up any relationship. 

These agreements are therefore commonly misunderstood (for even the most basic concepts such as who benefits from them and what can be included), summarily dismissed for emotional reasons, and dangerously ignored.. 

What is a prenuptial agreement (and why are they more common than you think)? 

A prenuptial agreement is a legal contract that outlines how assets, debts, and financial responsibilities will be handled, whether during the marriage as well as in the event of divorce or death. That concept obviously transcends net worth and socio-economic standing. 

While prenuptial agreements were once exclusively associated with high-net-worth individuals, the benefit of setting expectations and locking in the peace of mind that the counsel fees incident to divorce will be a fraction of what they could be (to say nothing of the emotional cost of protracted litigation) has gained significant traction in recent years. 

The American Academy of Matrimonial Lawyers reporting that 62% of divorce attorneys have realized an increase in prenups over the past several years, with the Millennial generation and younger driving much of this growth, is a strong indicator of this trend and the future of proactive approaches to marriage. 

The existential facts are that today’s couples are getting married later than in years past. They bring more assets, debts, income, and therefore financial complexity to the relationship and the financial merger that is a marriage. To wit, many enter marriage with established careers, student loans, retirement accounts, property ownership, business interests, inheritances, as well as children from a previous marriage or other dependents (such as an elderly parent). 

This shift highlights the benefit to couples in securing a clean financial framework that details what people think is fair at a time when that concept is not influenced (or corrupted) by the circumstances that led to divorce.

While the topic might be difficult or feel counterintuitive to bring up, an experienced family law attorney can help pivot these discussions into opportunities for transparency and financial planning. 

Four common myths about prenuptial agreements 

In light of persisting misconceptions about prenuptial agreements, from who should get one, how they work to their purpose, understanding the law and benefits of getting a prenup can allow you to make informed decisions that will define your future. 

Myth 1: You only need a prenup if you’re wealthy 

The misconception  that only couples with substantial wealth need prenuptial agreements is a dangerous assumption. In reality, prenups are helpful for couples regardless of income level and can be a decision that mitigates potentially catastrophic consequences… 

Take a teacher marrying a social worker, with both carrying student loans, owning modest assets, and each having alternate sources for potential income. Their prenuptial agreement might address situations like: 

• When one partner has significantly more debt. If the teacher has $15,000 in student loans while the social worker has $60,000, they can agree that each remains responsible for their own educational debt.
   

• Addressing family contributions /gifts. If the teacher’s family gives the couple recurring financial assistance (whether or not to the couple jointly) or a tangible benefit (e.g., annual vacations) that could be reduced to a dollar amount, such generosity could be excluded by a prenup in assessing the marital lifestyle and complex alimony concepts.
   

• Unequal contributions to major purchases. If the social worker contributes $15,000 from their savings toward a house, while the teacher contributes $5,000, a prenup could contemplate disparate ownership percentages and create credits in the event of a buyout or sale.
   

• Family caregiving responsibilities. When the teacher already sends $300 monthly to help support her aging mother, the agreement addresses how this decision/obligation impacts the marital lifestyle.
   

• Side income and businesses. If the social worker runs a weekend therapy practice or the teacher tutors students for extra income, a prenup could protect these assets by immunizing them from equitable distribution or establishing their valuations.
   

• Career change planning. When the teacher plans to pursue a master’s degree in counseling to become a therapist, a prenup could address the implications of that career shift , e.g., establishing an expectation for future income or building in considerations for the other party doing the heavier lifting in terms of earning money to sustain the marital lifestyle. 

Myth 2: Prenups are a self-fulfilling prophecy  

Many couples worry that even talking about getting a prenuptial agreement indicates they don’t trust one another or believe their marriage’s failure is a fait accompli. However, having a fire extinguisher in your house does not mean you believe it is going to catch fire, and wearing a seatbelt doesn’t mean you want your car to crash. 

Creating a prenup  is an honest and transparent conversation about financial values, goals, and concerns. The process can strengthen a relationship by getting both partners on the same page regarding their individual and shared finances, as well as how they will handle financial issues within the relationship both as short, intermediate, and long-term concepts   

In fact, couples who build financial trust and transparency before marriage report fewer money-related conflicts during their marriage according to  research from Kansas State University explaining that arguments about money are the top predictor of divorce. As such, making sure you and your spouse are financially aligned and the benefits prenuptial agreements offer in this context are undeniable. 

Myth 3: Prenuptial agreements only matter if you get divorced 

While prenups protect parties in the event of divorce, these documents offer benefits throughout a marriage. Prenuptial agreements can clarify property ownership for estate planning purposes, streamline tax decisions, and provide guidance for business ownership and management decisions during the marriage. 

These agreements also address ongoing financial responsibilities during a marriage. A prenup could include provisions around:  

• Career decisions 

• Debt management expectations 

• Family assets  

• Business interests 

• Inheritance protection 

• Investment strategies 

• Real estate ownership 

Note that child support cannot be predetermined in a prenuptial agreement, as courts always retain authority to determine what’s in a child’s best interest. 

Rather than creating rigid rules, prenups establish a framework for navigating financial decisions as a couple, which helps reduce conflicts and provides structure if circumstances change. 

Myth 4: Courts always enforce prenuptial agreements 

Properly executed prenuptial agreements are generally enforceable, but the key phrase here is “properly executed.” New Jersey state law requires that a prenuptial agreement meet specific legal requirements to be valid, including: 

• Executed voluntarily by both parties 

• Includes full and fair disclosure of all assets and debts (with Schedules documenting same) 

• Was not the result of fraud, duress, or overreaching 

• Is not unconscionably unfair to either party 

• Was signed with sufficient time before the wedding (not last-minute) 

• Does not leave either party financially unable to support him/herself (e.g. a ward of the State) 

If a prenup doesn’t meet these conditions, the court may refuse to enforce it. In the case of such invalidated agreements, the default laws applicable to equitable distribution and alimony would be applied by a judge  

These laws do not consider what you think is fair and impose a set of legal consequences that may well deviate from the expectations that you and your significant other have going into your marriage. The practical effect of this reality is that exploring a prenuptial agreement can be the difference between considering your financial future before that decision is forced upon you with the added stress of anger and resentment over the end of a relationship.  

Why consulting a lawyer is essential for a fair prenup 

Drafting a prenuptial agreement requires careful legal guidance and structuring to ensure enforceability. The road is littered with stories of those who thought they had a valid document, only to be blindsided by the reality that their DIY efforts or inexperienced counsel fell short of the standards required to make an agreement enforceable. 

Common missteps in drafting prenuptial agreements are: 

Understanding the potential interplay of state laws

Where you live now and whether New Jersey law should apply is a common issue in the context of prenuptial agreements. What’s valid in New York might be unenforceable in New Jersey and leave you exposed in the event of a jurisdictional question/dispute. An experienced family law attorney understands these nuances and can draft an agreement that safeguards your interests while meeting all legal requirements. 

Legal counsel will ensure full disclosure of assets and debts

Full disclosure is essential for a valid prenuptial agreement. Your attorney can help identify relevant financial information and ensure both you and your future spouse understand the agreement’s implications and make sure that information is sufficiently included in the ultimately executed agreement  Even strongly drafted prenups can fail without attaching the schedules for requisite disclosures and/or the language necessary to protect against after-the-fact claims that relevant information was excluded to the other side’s prejudice. 

Assessing options and understanding the implications of terms negotiated

Prenuptial agreements allow couples to be creative and set their own terms for the hypothetical end of a marriage. That may include step-ups in terms of alimony based on the number of years you have been together (whether starting with the date of a marriage or before), conditions addressing rights of access to and the timing for selling properties, and even highly technical concepts touching on family planning (i.e., frozen embryos). 

Moreover, experienced family law counsel will inherently embrace the opportunity such proactive thinking allows in terms of drafting creative provisions designed for the nuances of your family/relationship, as well as guide you through the process to ensure every decision you make is informed, which includes appreciating the consequences of each such as understanding that child support exists as a separate obligation that must be addressed if and when divorce becomes a reality. 

Consult a New Jersey prenuptial agreement attorney 

Our family law attorneys at Dughi, Hewit & Domalewski understand the sensitive nature of these discussions and work with couples to create agreements that protect both parties while supporting their shared goals. 

We take the time to understand your unique circumstances, clearly explain your options, and draft agreements that provide the security and peace of mind you’re seeking. 

Schedule your consultation with our team today to discuss how a prenuptial agreement can benefit your situation and ensure your financial future is protected.