Why Prenups Blow Up: Seven Ways Premarital Agreements Fail

“Prenups don’t work!” the YouTuber practically screamed into the microphone, lamenting the downfall of men everywhere whose fortunes were being stolen from their gold digging exes. [Insert eyeroll here.] “A man works for years, decides to marry a woman, and insists on a prenup. The sign one, and then she leaves taking half his stuff because the prenup means nothing!”

As an attorney, I have an ingrained way of thinking about situations that was baked into me throughout law school. It’s something I can’t turn off, and many good attorneys will tell you the same thing. In law school, you are pushed to objectively analyze a situation, review the different legal principles in your mind, and tick off the pros and cons, and come to a conclusion. This happens automatically in my mind without prompting, and it applies in all situations for me, not just work. The next step in this imposed way of thinking is when you actually have a client in front of you is to reexamine that whole process trying to advocate for the points that favor the client and downplay, excuse, or dismiss the points that don’t.

The YouTuber is screaming into the void because he is doing none of this and the problem is a lot of people may be listening to the screaming because they want to feel like they aren’t the only ones in a failed relationship who lost out in a divorce. (And it doesn’t matter if its men or women since everyone feels like they lost in a divorce.) He’s responding emotionally without a real, objective examination of the legal principles. Premarital agreements can be done successfully, and you probably won’t hear about it on YouTube when it does. Why not? Because, like I said, even with a successful premarital agreement in a divorce, no one is ever thrilled with the outcome of their divorce. Think of having to change a flat tire on an empty road but you have a good spare tire, the jack, and even wipes to clean up afterwards; you’re relieved you got the tire changed, but you’re not thrilled because you had to change the tire in the first place.

So why do some premarital agreements fail, and how do you make sure a premarital agreement in your situation doesn’t fail? Here are the top seven reasons prenups fail.

• Not Having the Agreement in Writing: This sounds fundamental, but make sure your premarital agreement is in writing and signed. While most people would think of this, and certainly any attorney whose law license is worth the paper it was printed on, you need to have a premarital agreement comply with state law, and this always means that it must be in writing. Don’t let a quick Google search for “agreements” let you think that just because your state allows legally enforceable verbal agreements that this applies to prenups. All 50 states require premarital agreements to be in writing, but some states do allow other kinds of verbal contracts to be enforced. The reason all prenups have to be in writing is that people under the pressure of a divorce have a huge incentive to lie, and while there are going to be legal proceedings in a divorce at least the terms of this contract would be in writing. Speaking of pressures and incentives…

• Prenup Signed Too Close to the Wedding: One of the most effective arguments in getting a premarital agreement thrown out is that it was signed under duress, and a common “duress” factor is that the spouse sprung the agreement at the last minute. The argument goes that they were now caught with already having spent a lot of time and money on the wedding, the social pressure of needing to follow through with the wedding now that the wedding date was so near, and not wanting to have wasted a lot of time in their relationship to walk away if a prenup was not what they wanted. And this is a convincing argument that frequently works the closer the idea is presented to a wedding date. If a prenup is what you want prior to marriage, it is probably best to bring up the subject even before getting engaged or at least several months before the wedding.

• Not Being Represented By an Attorney: When someone isn’t represented by an attorney in putting together a premarital agreement, then they can always claim later that they didn’t really understand the terms of the agreement. Depending on the different terms, that may very well be true. For instance, if a couple roughly makes the same income and they have a very balanced premarital agreement that lets everyone keep all of the accounts they bring into the marriage, all assets accumulated by the parties during the marriage are to be split evenly with no spousal support, and no one will be required to stop working, then not being represented by an attorney is not going to have a huge effect on whether or not the agreement is thrown out. However, if one party makes a lot more money and owns the house and other major assets, the other party is being required to not work and be a homemaker, and the agreement states that in the event of a divorce the parties keep all of their respective assets and there is to be no support, then there very likely would be an issue with the spouse who is staying at home not being represented by an attorney. This is compounded greatly if the other spouse earning all of the money and keeping their assets was represented by an attorney.

• Not Owning Assets in Line With the Agreement: Part of a well-crafted and effective premarital agreement is a complete and honest disclosure of assets from both parties, at least to the point both parties legitimately sign off that they are satisfied with the disclosure and nothing has been hidden. Another part of assets in the prenup is how assets are to be owned and titled moving forward during the marriage. If certain accounts are to be kept separate, then they need to be kept separate. If there are supposed to be certain joint accounts, then they should be titled in both spouse’s names. One common clause in most premarital agreements that keep situations flexible is that the parties can agree to retitle or create new assets and accounts jointly, and often such accounts would be divided equally. The mistakes come when life changes things, assets get converted or changed, and things are retitled incorrectly. Switching financial advisors and they set up separate accounts jointly, or convince the couple to have joint investments because their management fees would be lower. A new house is purchased with one spouse’s separate assets, and the real estate attorney assumes the house should be titled jointly as a married couple. Or more nefariously one spouse starts the paperwork to move or convert an individual asset of the other spouse, and the new asset or account suddenly becomes joint.

• Not living in line with the agreement: Many pre-marital agreements aren’t just about assets but also about income and lifestyle. The agreement may specify what assets each spouse gets to keep in the event of a divorce, but it can and often will detail how joint and individual living expenses will be paid. When the spouses roughly earn the same amount of money, then expenses will often be equal. If one party earns much more than the other, then expenses may be paid in proportion to income. Problems can occur if a party begins paying more for these expenses despite what the agreement states over a longer period of time. If that happens, it becomes easier for a court to put aside at least those expense proportions and award some support to the other spouse. By far, the better option is to either stick to the agreement, or update the prenup to reflect the changed circumstances. Which brings us to the next big mistake…

• Not Updating/Renewing the Agreement Periodically: Another way for a premarital agreement to be thrown out is for it to “grow stale” with wildly changed circumstances (or at least a judge buying when one party argues it). A premarital agreement done fifteen or twenty years ago and never affirmed or updated stands a good chance of a judge throwing it out and going with state law and rules instead. It is a good policy at least every five years, if not more often, to revisit the premarital agreement, with each spouse again having their own attorney, to review and then update or change the terms to reflect the current situation. This also includes updating the list of separate and joint assets, addressing new issues that may not have been addressed in the previous version (such as child care and inheritances), and any changes in support terms. It becomes extremely difficult for a court to throw out a premarital agreement because it was “stale” when it is updated and signed every 3-5 years.

• The Prenup is a Deficient Document (i.e. DIY): We saved the best for last, which is also one that is most likely to have YouTubers screaming about how prenups don’t work… when a party downloads a template, attempts to do it themselves, and screws up something big. While it might seem easy to simply grab an online document, fill in a few blanks, and say “viola! it’s a prenup,” it’s not that easy. Premarital agreements should be handled by experienced attorneys who know what to look for, what to include, what to exclude, and what to avoid. All it takes is that one simple misstep by a do-it-yourselfer to throw an agreement into turmoil and have it end up being thrown out by a judge in a divorce.

While premarital agreements need to include various terms in a balanced manner under state law, these seven factors can destroy the intent of the agreement. Putting together a prenup also isn’t as simple as signing the document and then going about life. It requires that your life take note and comply with the agreement you both created, and, just like marriage, that takes a little work.