What is the purpose of a prenup agreement?


(Last Updated On: July 7, 2021)

Everyday there seems to be another issue of divorce highlighted by the media.  One of the biggest areas of concern appears to be prenup agreements /co-habitation agreements as celebrities seem to contest these all the time.  However, prenuptial/co-habitation agreements are not just for the wealthy or the famous.  The purpose for drafting them and the conversations which need to take place to craft them are critical.

How does a prenup affect a marriage?

I am currently researching a book entitled Get It Right This Time and Move On: The Conversation You Need to Have. This is a revolutionary book covering the number of issues facing people going through not only another divorce, but offers ways to assess another significant relationship.  It also guides people on their way to a smart relationship the next time, and moving on with the rest of their lives intact.  While researching this book, I found that there seems to be a clear consensus on the importance of prenuptial/co-habitation and cohabitation agreementsOpens in a new tab. which need to be included in the mix.

Both type of agreements – prenuptial and cohabitation – are on the rise.  Despite this increase, many divorce lawyers feel that not enough of their clients are requesting these agreements. On the client side, there needs to be greater education about what these agreements are for. Furthermore, people are afraid to discuss their thoughts behind these agreements with a potential partner as a result of potential conflict and/or undermining their relationship.

The purpose of prenuptial agreement

People are less casual about the concept of prenuptial/ co-habitation and there is less stigma attached to them as in previous generations.  They are becoming far more acceptable.  The purpose is to protect assets in the event of divorce or death.  Interesting, many people don’t think about how an untimely passing could factor into the mix.

People are afraid to talk about prenuptial/ co-habitation with their partner as they think the issues/financials they want to discuss are going to affect the relationship.  The truth is, if you can’t have these serious conversations, then perhaps the relationship wouldn’t make it in the long term.

The prenuptial/co-habitation agreement is an excellent opportunity to evaluate short, medium and long term expectations of the relationship, help you think about the important factors in the relationship and forces you to discuss finances – which many couples do not want to consider.

As one family lawyer I spoke to said – when it comes to physical intimacy, people have no issue talking about their wants and needs.  But, when it‘s time to discuss the real issues of a relationship and what is important to a couple financially, people want to avoid these conversations until it is too late.  They are afraid that discussing their philosophy on finances is going to unravel the relationship.

Why is a prenuptial agreement a good idea?

You can look at prenuptial/co-habitation agreement as divorce insurance.  For example, you have car insurance, hoping that you never need it, but if you are in an accident….well thank goodness you’ve got the protection.

Many very wealthy families are preparing “family prenuptial/co-habitation/co-habitation” (for every new partner to sign) to protect family assets, business and so on.

Will a prenup protect my retirement?

The divorce rate risesOpens in a new tab. with each subsequent marriage.  For instance, with second time marriage the likelihood of divorce is 60%. As you have older couples getting married there are other factors to consider that a young couple don’t worry about – children.  It is obvious that people want to protect much of the wealth accumulated outside of the new marriage for their children.

How does a prenup protect you?

A Prenuptial/co-habitation agreement for older couples has a different meaning than for younger couples who are just starting out.  The younger couple in many instances has less financially to be concerned about.

Middle income families are beginning to get prenuptial/co-habitation agreements so as not to offend the children; as the children want to ensure that the family heirlooms stay in the family and are not lost in the event of a divorce.  This way, you can protect grandma’s sterling place settings, sentimental family items and so on.

Much of the same conversation as to how finances are going to be managed long, medium and short term can be addressed by a co-habitation agreement.

Not for the rich and famous

Many people think a prenuptial agreementOpens in a new tab. is for the rich and famous.  However, there are many issues that the average person needs to consider and discuss with their new partner.  It’s an excellent opportunity to understand his/her financial perspectives and expectations before you get married.  Many people are afraid to have this important conversation as they fear it might ruin the relationship.  But, if you can’t talk about the important things and expect that things will just “work itself out” when married, it doesn’t always happen that way.  Don’t you want an understanding of how each other thinks, and ensure you are on the same page?

  • Think of it as marriage/divorce insurance.  You want the marriage to work, but if it doesn’t you’ve protected yourself.
  • The blended family dilemma.  You want your children to support your new marriage; however you want them to feel protected as well.
  • What if you die? Without sounding morbid, it is a consideration……how you want your assets to be divided between your new partner and your children.

I’m about to get married for the second time. How do I ensure that my children and my new wife won’t ever have to duke it out over my estate after I’m gone?

Prenuptial co-habitation agreements are an excellent way to protect assets in the event of separation/divorce. However, the important conversations a couple needs to have when agreeing to craft the agreement could actually go a long way to ensuring they are on the same page and hopefully avoid the all-out war, which too often results.

Now more than ever it’s time to consider a Prenuptial AgreementOpens in a new tab. if you’re getting married, or a Cohabitation

Tune in to The Smart Divorce on Divorce Source Radio to listen to our guest, family lawyer Ed WinerOpens in a new tab., is one of the top ten family lawyers in the United States.  Mr. Winer has practiced family law for four decades and is expert in drafting, negotiating and litigating antenuptial and postnuptial agreements, addressing business valuations, complex property divisions and other business-related issues.

Mr. Winer explains the importance of the prenup and cohab agreements, and outlines the significant financial questions couples should discuss – and individuals consider – before making a commitment. Mr. Winer refers to the prenup as the engagement ring of the twenty first century.  Listen in to find out why…..we discuss:

  • Why the prenup, cohab and postnup agreements are for everyone
  • What these financial Agreements are
  • Does it mean that you don’t trust your partner?
  • What’s in it for the person that has less financially?
  • Do these financial Agreements destroy or build a loving relationship?
  • What about the matrimonial home?
  • And much more……

Prenups: The Engagement Ring of the Twenty First CenturyOpens in a new tab.

Now more than ever it’s time to consider a Prenuptial Agreement if you’re getting married, or a Cohabitation Agreement if you’re living together.   The prenup seems so utterly unromantic — or just plain wrong — but it’s also become so right for so many these days: those keenly aware that a marriage may end up in a legal separation, divorce or death.

Deborah Moskovitch

This blog post was written by Deborah Moskovitch the author of "The Smart Divorce", the catalyst for this website. This evergreen book covers how to manage the divorce process for a less painful result.

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