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Happy coupleWhen planning for a marriage, couples may not consider the possibility of divorce. However, many financial experts recommend that everyone get a prenup in case a divorce occurs. The marriage rate is 5.1 per 1,000 people while the divorce rate is 2.3 per 1,000 population, both of which are lows for the last 50 years. Regardless, those that do get married might benefit from a prenup and the costs to get one can vary widely. If a prenup seems like something you should pursue, consider working with a financial advisor who can help protect your financial assets.

What Is a Prenup?

A prenup, or prenuptial agreement, is a contract between prospective spouses. Prenups typically list both spouses’ assets and dictate what should be done if either spouse dies or in the case of a divorce. Prenups are legally binding agreements, and each state has different rules that dictate what prenups should include.

Many people find a prenup useful because it can protect the assets of both parties before they join together in marriage, uniting their assets. Many people see a prenup as one-sided with the wealthier party the one benefiting. Instead, many prenups are used to having an amicable separation if the marriage doesn’t work out. Agreeing on how assets will be split before you are married prevents an ugly divorce later.

How Much a Prenup Costs

Prenups can range in cost based on several factors. For most couples, the cost typically ranges from $1,000 up to $10,000 for more complicated situations. While there are templates and information available online, it’s wise to use a private attorney to ensure that the agreement is valid and legally binding.

Factors that determine the cost of a prenup can be the city and state you reside in, how many assets and debts each individual has, the reputation and practice of the attorney you choose and any prolonged negotiations. The couple’s assets and liabilities play a factor in how long it will take an attorney to draw up an agreement, so any couple with complex assets may be billed more for the service.

Another consideration: For one or both parties in a divorce, a prenup’s cost could end up being less than the cost of leaving the distribution of assets to a judge’s interpretation of a state’s equitable distribution laws.

Why a Prenup Is Useful

Unhappy coupleSome people think a prenup is only for extremely wealthy people or for people who think divorce is in their future. However, a prenup can be useful in several situations. For example, suppose one or both of the individuals has kids from a previous marriage. In that case, a prenup can help them sort out the details of how they want to divide their assets should one individual die prematurely or if the couple gets divorced. The same is true if one or both individuals receive an inheritance before the marriage that they want to protect.

Another example is if one or both prospective spouses have assets before the marriage or have significant debt. They may want to protect the other from inheriting their debt or protect their assets by keeping them legally separate. Any assets or debt that a couple accumulates during their marriage is community property or joint marital property in most states.

Although it’s wise for most couples to get a prenup, they’re not right for everyone. If a couple decides not to sign a prenup, they may still want to document all their accounts as they stand before the marriage. That way, they’ll know exactly what their assets are should they need proof in the future.

How and When to Talk About a Prenup

Couples should discuss a prenup long before their wedding date. Getting a prenup is a multi-step process, so it is wise for a couple to discuss if and how they will get a prenup at least 30 days before their wedding.

The first step to getting a prenup is to do your research. You should understand what goes into a prenup, and what you want to cover and learn more about attorneys that can execute your prenup. Most states require that after a prenup is presented to an individual, they must take at least seven days to read it and seek legal counsel. Therefore, many couples choose to have their prenups written months before their wedding.

Additionally, prenups are not legally binding until the individuals get married. Each state has unique prenuptial agreement laws, so be sure to investigate what the parameters are where you live before making any decisions to move forward. It’s also a good idea to get legal representation for both parties during the process.

The Bottom Line

Prenuptial agreement and a judge's gavel

The costs of a prenup will depend on a number of factors. Therefore, it’s a good idea for couples considering marriage to research prenuptial agreements and their cost. Many people choose to get prenups to protect their future spouse or protect their assets, families and more. Because each prenup is different, prenups vary in cost. If you have additional questions, you may want to consult with a financial advisor and an attorney who can point you in the right direction.

Financial Tips for Couples

  • A financial advisor can help you manage investments both individually and as a couple. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goalsget started now.
  • If you and your partner are considering buying a residence, using a free calculator to see how much house you can afford can keep you from making a costly mistake.
  • Photo credit: ©iStock.com/Cecilie_Arcurs, ©iStock.com/gorodenkoff, ©iStock.com/zimmytws
Ashley Kilroy Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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