The Modern Prenuptial Agreement

Prenuptial agreements are more popular than ever. Wise counsel can prevent “buyer’s remorse”.

“In my prenuptial era”

Before reciting wedding vows, exchanging rings and cutting the cake, a growing number of couples are signing prenuptial agreements. Prenuptial agreements, sometimes called antenuptial agreements, premarital agreements, or “prenups” for short, are contracts in which soon-to-be-spouses decide their rights in case of a divorce or the death of either spouse during their marriage.

Prenuptial agreements date back at least as far as the sixteenth century. But until the advent of “no-fault divorce” approximately 50 years ago, American divorce courts were reluctant to enforce these agreements, citing public policy concerns. Today, all 50 US states enforce prenuptial agreements, although different states hold them to different standards.

Despite the increased viability of prenuptial agreements in recent decades, these agreements remained relatively rare among marrying couples until the past decade. In one 2010 poll, only 3% of Americans reported having signed a prenuptial agreement. By 2023, that number had skyrocketed to 21%, an increase driven mostly by Millennial and Gen Z respondents.

Reasons for the rise in popularity

Many theories have surfaced to explain this spike in the popularity of the prenup. The agreements have become more common as the United States has experienced demographic changes in the workforce. Women are gaining ground in high-earning occupations and hold nearly half of managerial positions today. As women increasingly enter marriage with assets of their own, some are requesting prenuptial agreements to protect those premarital assets.

Another contributing factor is the rise in the average age at which people first marry, which rose by seven years between 1975 and 2025. According to estimates from recent US census data, men today are getting married for the first time at an average age of 30.8 years and women are entering first marriages at the average age of 28.4 years. While waiting to say, “I do,” singles spend years accumulating assets and debts. Whether they begin married life with a growing retirement account, a mountain of student debt, or both, many happy couples want to delineate what is “mine” and what is “yours” from what is “ours”.

The popularity of prenups among younger generations may also be motivated, in part, by earlier generations’ divorce rates. According to the Pew Research Center, nearly 50% of American marriages that took place in the 1980s have ended in divorce. Many Millennials and Gen Z adults had front row seats to those divorces during childhood. Compared to Baby Boomers and Gen X, younger generations are more likely to delay or opt out of marriage altogether. As of 2021, about 25% of 40-year-old Americans had never been married, up from just 6% in 1980. Perhaps it is little wonder that, among those who do marry, more young Americans are requesting prenuptial agreements.

As prenuptial agreements have grown in popularity, they have shed some of their stigma. Rachel Lindsay, former star of the reality dating show “The Bachelorette”, has publicly expressed regret that she had not tried harder to convince her ex-husband to sign a prenuptial agreement. When Jeff Bezos, founder of Amazon, divorced without a prenuptial agreement in 2019, his ex-wife became the fifth-richest woman in the world – a fact that made international headlines. Kim Kardashian plugged prenuptial agreements on a recent podcast appearance, advising listeners to “get a prenup, no matter what”.

Who (or what) is drafting today’s prenups?

For better or for worse, there is now a booming market for prenuptial agreements. Who is drafting them? Many family law and estate planning attorneys have the specialised knowledge and experience necessary to draft strong prenuptial agreements. Recently, as demand has grown, new apps and online services have sprung up claiming to offer prenups on demand. These services use AI to generate draft agreements, based on user input from online questionnaires.

While disclaimers and warnings urge consultation with a lawyer for a “final review” or “Q&A” before signing, not all users will heed that advice. Those who do consult lawyers may have unrealistic expectations. Parties may be surprised to learn that the same lawyer cannot represent both halves of the couple, or that detailed financial disclosures are necessary before signing the agreement.

A properly drafted prenuptial agreement must be tailored to account for the specific goals, circumstances and intentions of the parties getting married. Whether an attorney is creating a first draft or reviewing a draft, the process will require in-depth conversations with the client. A good attorney will make sure the client understands what their rights would be without a prenuptial agreement and how the terms of the agreement alter those rights. Experienced attorneys can offer suggestions to strengthen the terms of an agreement or to address unique circumstances.

To date, there are no legal decisions addressing the enforceability of an AI-drafted prenup. Those who use AI as a substitute for a lawyer run the risks of unintended consequences, invalid provisions and fatal flaws that may render their prenups unenforceable. A cheap prenup may turn into an expensive lesson.

What could go wrong?

Couples who sign a prenuptial agreement are not guaranteed a simple, hassle-free divorce. Either spouse can challenge a prenuptial agreement and ask the divorce court to find it unenforceable.

The law governing enforceability of prenuptial agreements constantly evolves based on legislative changes and court rulings. Perhaps judges will soon need to decide whether a relationship with an AI chatbot can violate an infidelity clause, or the extent to which a prenup can limit ex-spouses from posting about their marriage on social media. While most properly drafted prenuptial agreements are upheld, enforcement cannot be guaranteed, and there are situations in which an agreement is found unenforceable.

In the US, prenuptial agreements are governed by state law, not federal law, meaning each state has its own rules and standards which judges must apply when one spouse challenges a prenup’s enforceability. While 26 states have adopted versions of the 1983 Uniform Premarital Agreements Act, and two states have adopted the updated 2012 Uniform Premarital and Marital Agreements Act, each of the remaining 22 states has its own legal framework governing prenuptial agreements and those legal frameworks are nuanced.

Some states’ laws are more pro-enforcement than others. Among the factors that may be weighed when a prenuptial agreement is challenged are:

• Procedural issues – Did the spouses fully disclose their income and assets; were both parties given the opportunity to consult with legal counsel of their own choosing; was the agreement signed sufficiently in advance of the wedding; and was the document properly witnessed and notarised?
• Fairness – In many states, an agreement that leaves one spouse with little or nothing risks a challenge to its enforceability. Some states consider only whether the agreement was fair at the time of signing, but a few states require a “second look” at whether enforcement of the agreement would be unfair or unreasonable at the time of enforcement. Although an agreement may be fair at the time it was signed, if at the time of divorce or death circumstances have changed so drastically that enforcement would be unconscionable, the court may declare the agreement unenforceable.

Minnesota is one of the 22 states with its own framework governing the interpretation and enforceability of prenuptial agreements, as opposed to adopting a uniform law. In 2024, the state legislature approved changes to Minnesota Statutes Section 519.11, regarding prenuptial and postnuptial agreements, to address confusion that arose following the Minnesota Supreme Court’s decision in Kremer v Kremer, specifically to eliminate the dual-track analysis for marital and non-marital property that the Kremer case arguably created. In addition, the changes to the statute, which apply to agreements signed on or after 1 August 2024, better clarify the procedural requirements and fairness standards Minnesota courts must apply when deciding whether to enforce a prenuptial agreement, including by: 

• defining what it means to provide “full and fair disclosure” of a party’s current income and property;
• requiring signing at least seven days before the date of marriage in order for an agreement to be presumed enforceable, putting the burden of proof on the party challenging the agreement;
• for agreements signed less than seven days before the marriage, putting the burden of proof on the party seeking to enforce the agreement; and
• allowing the marriage itself to serve as sufficient “consideration” for the terms of the prenuptial agreement.

Agreements may be deemed unenforceable if they include provisions that violate law or public policy. For example, all 50 states agree that a prenuptial agreement may not determine custody arrangements or limit child support obligations. But not all issues are so clear-cut. A provision found to violate public policy in one state might be strictly enforced in the state next door. “Infidelity” clauses that penalise a spouse for conduct during the marriage are currently enforced by some states, but have been held unenforceable in a growing number of states.

If a court finds all or a portion of a prenuptial agreement to be unenforceable, then some or all of the rights waived by the spouses would be reinstated. Thoughtful planning and drafting help avoid that circumstance.

Should you sign a prenup?

Regardless of your state of residence, you should consider creating a prenuptial agreement if any of the following apply:

• you own or expect to inherit significant wealth;
• you own a business;
• you co-own a business with partners and need to protect their interests, as well as think about succession planning for the business;
• you own unique property such as copyrights or other intellectual property; or
• you have children from a previous relationship and need to protect assets you have earmarked for them.

A prenuptial agreement can be an effective tool for protecting hard-earned premarital wealth, particularly for closely held business owners seeking to protect their business, family and partners. By “carving out” business interests from division in a divorce or distribution upon death, business owners can marry without running the risk of making their spouse a future partner.

A prenuptial agreement can also be an important element to business succession planning. In the event of a business owner’s death, it is important to have a plan for their ownership interest, especially if the business is owned with family members or other partners.

Prenuptial agreements also overlap with estate and tax planning. Prenuptial agreements can be a useful tool for protecting wealth as people further along in life marry or remarry. About 66% of divorced Americans go on to remarry, and many have children from earlier relationships. Parents wishing to protect their estate for those children, while still providing for their spouse, have options available. For example, the new spouse may waive their rights to inherit; and in turn, the parent may create a trust that would provide annual income to their new spouse, with the underlying assets ultimately awarded to the children, thereby also achieving advantageous tax treatment.

What goes into a prenup?

Prenuptial agreements typically contain:

• full disclosure of assets, liabilities and income;
• acknowledgements that one or both parties waive certain rights in the event of death or divorce;
• agreements as to what each spouse will receive, in lieu of the rights waived; and
• an express list of intentions, eg, if one party co-owns a business with siblings and intends that ownership should stay in the family, it is important that the other party acknowledges this intention.

Steps to creating a premarital agreement include:

• Plan ahead. Some states require that prenuptial agreements be signed at least a certain number of days before the wedding. Even in states without express deadlines for signing, an agreement signed too close to the wedding creates the risk of a future challenge to enforceability. Planning ahead will help parties set emotions aside and allow ample time for negotiations.
• Find an experienced attorney who drafts prenuptial agreements on a regular basis, and stays up to date with changing laws. A prenuptial agreement is a contract between two consenting adults. Unlike business contracts, however, courts will carefully scrutinise prenuptial agreements for fairness. Each party should have separate legal counsel of their own choosing. If one party is not able to afford legal counsel, the other party should make funds available for that purpose.
• Prepare a complete and accurate financial statement. Full disclosure of finances before signing the agreement is essential, and a statement of assets, debts and income should be attached to the agreement. While a written disclosure is not required in every state, it is a best practice to mitigate the risk of an enforcement challenge.
• Articulate your circumstances and expectations. It is important to disclose why certain assets need to be protected. For example, your business may present a particularly difficult valuation issue that both parties wish to avoid. It is also important to state that the parties believe the agreement will be fair and should be enforced, even if circumstances change. For instance, both parties may intend to continue working, but they should verify their intention that the agreement be enforced even if one party leaves the workforce and relies on the other party’s income.

While prenuptial agreements are more common today, they are still a topic of conversation not easily broached. Contrary to popular perception, however, a good prenuptial agreement is not about creating an inevitable, unhappy ending, but rather, about planning for possible future events, with input from both spouses in an honest, forthright and respectful manner.