Maxwell Hills | October 21, 2022 | Prenuptial Agreement
For many couples, a prenuptial agreement, or “prenup,” is an essential step in marriage. A prenup can protect each spouse’s financial interests and provide peace of mind during a divorce.
However, some couples may hesitate to create a prenup because they are worried about the cost or are unsure if it’s something they need. In this article, we’ll explore how much a prenup can cost and if it’s worth the effort.
Importance of a Prenuptial Agreement
A prenuptial agreement, also known as a “prenup,” is a contract entered into before marriage. The agreement’s purpose is to secure each spouse’s financial rights in the event of divorce or death. Although it may seem unromantic to discuss such matters before marriage, couples who do so often find that the process strengthens their relationship. After all, clear communication and financial planning are key ingredients in any happy and successful marriage.
Like most people, you probably have some assets and liabilities—a house, a car, student loans, credit card debt—that you bring into your marriage. A prenup can protect your separate property interests in these items should you divorce or pass away. Without a prenup, your state’s laws will determine how your property is divided in the event of divorce or death, and that may not be equitable or fair.
Prenups can also protect you from becoming responsible for your spouse’s debts. For example, if your spouse has significant credit card debt or student loans when you marry, a prenup can protect you from being held liable for those debts if you divorce or your spouse passes away.
What are the Total Costs of a Prenuptial Agreement?
While a prenup can save a lot of time, money, and stress in the event of a divorce, some people see it as an unnecessary expense. After all, if you’re planning on getting married, shouldn’t you be planning on staying married?
However, the fact is that nearly 50% of all marriages in the United States end in divorce. And if you have significant assets, you could lose half of everything you own if you don’t have a prenup in place.
The average cost of a prenuptial agreement ranges from $5,000 to $7,500. That may seem like a lot of money, but when you compare it to the cost of a divorce, it is really not that much. The average cost of a divorce is anywhere from $15,000 to $20,000. And that does not even include the emotional costs of a divorce.
If one party chooses to have their lawyer review the agreement instead of drafting it from scratch, the cost will be lower—usually around $2,500. However, it’s important to remember that you get what you pay for. A cheap prenup may not hold up in court if it’s challenged, which could end up costing you more in the long run.
Is a Prenuptial Agreement Expensive?
While the cost of a prenuptial agreement may seem high, it’s important to remember that it is a fraction of the cost of a divorce. And in many cases, it can save you a lot of money, time, and stress in the event of a divorce.
If you’re thinking about getting married and having significant assets, you must talk to an experienced family law attorney about whether or not a prenup is right for you.
While the overall costs of a prenuptial are typically affordable when considering the benefits, some factors add to the price:
Length of Negotiation
Legal fees could quickly become expensive depending on how long your negotiations take. Before meeting with your attorney, the best way to keep costs down is to be decisive and clearly understand what you want from the agreement. Then, if you and your fiance can agree on most topics, your lawyer can put the finishing touches on the document rather than spend hours negotiating.
The time it takes to draw up the paperwork can affect how much a prenup costs. The average cost of a prenuptial agreement is $5,000 to $7,500. They may charge by the hour if you’re working with an attorney. The more time it takes to negotiate and draft the agreement, the higher the cost.
Your geographic location can also affect the cost of a prenuptial agreement. For example, if you live in a city with a high cost of living, you can expect to pay more for a prenup than if you live in a smaller town. This is because attorneys in big cities tend to charge more per hour than smaller towns.
The Complexity of the Agreement
If you have a lot of assets or you’re dealing with complex financial situations, your prenup is likely to be more complex and, therefore, more expensive. For example, if you own a business or have significant debt, your prenup will need to address those topics and property division.
Is a Prenuptial Agreement Worth It?
Prenups, or prenuptial agreements, have gotten a bad rap over the years. Some see them as unromantic or a sign that one person does not trust the other. Others believe that only people with a lot of money need them. So, is a prenup worth the cost? In short, the answer is yes. Prenups are not as expensive as some think, and there are many benefits to having one.
One of the main reasons people shy away from prenups is because they think they are too expensive. This does not have to be the case. Yes, there will be some costs associated with drafting and signing a prenup, such as lawyer fees, but this cost is minimal in the grand scheme of things. In addition, the peace of mind that comes with knowing your assets are protected in case something happens to your marriage is priceless.
Another reason to consider a prenup is for protection against creditors. If your spouse has creditors coming after them, your assets may be at risk if you do not have a prenup in place. A prenup can also protect you if your spouse dies and leaves a lot of debt behind. Without a prenup, you could be responsible for paying off those debts even though they are not technically yours.
Protect Yourself With a Prenuptial Agreement
Regardless of the cost, a prenuptial agreement is worth considering if you have significant assets or you’re entering into a second marriage. It can save you a lot of money, time, and stress in the event of a divorce or death. If you’re thinking about getting married, talk to an experienced family law attorney about whether or not a prenup is right for you.