The Cons of Prenuptial Agreements


As we talked about recently, there are a lot of pros to prenuptial agreements, even if they get a bad rap. When used wisely, and in the right circumstances, a prenup can be a useful legal tool.

Unfortunately, the bad PR is justified in some respects. Today we’re going to talk about some of the shortcomings and issues associated with prenuptial agreements.

Prenups that incorporate fidelity clauses can significantly raise the cost of divorce.

One of the best attributes of prenups is that they can greatly reduce divorce costs, because they spell out most of the details ahead of time. You don’t rack up hours of billable hours with lawyers as they negotiate the details. But when you include a so-called “lifestyle clause,” which usually refers to a fidelity clause that penalizes a spouse if they are caught cheating, that cost benefit goes out the window.

The reason for this is that most courts have a very high bar for proving infidelity. Managing to submit enough proof to convince a judge to invoke an infidelity clause will require many hours in court (and many more billable hours). Unless you have an extremely large estate, the tens of thousands of dollars in attorney fees simply aren’t worth it.

This is why many states—including California—are “no fault” states that disallow the use of fidelity clauses. Such clauses simply tangle up the legal system too much to be of much use, because of the difficulty and expense of enforcing them.

Aggressive prenups can seriously damage the trust in a relationship.

Imagine that you have had a wonderful relationship with someone. It hasn’t been perfect, but it’s been close: great communication, wonderful memories, and feelings you’ve never shared with anyone before. Now, you’re ready to affirm that commitment by marrying that person. But after you’ve exchanged engagement rings, they hand you a contract that goes into a great deal in specifying how your soon-to-be spouse is going to ensure that you don’t gain ownership of any of their existing property, if the relationship should fail.

It can feel like Dr. Jekyll has been replaced with Mr. (or Miss) Hyde. Where did that wonderful and compassionate person that you loved disappear to? And being told that it’s simply a matter of business, or a necessary precaution if the worst happens, isn’t going to improve the situation any.

Unless the necessity of such legal precautions have been raised early on and discussed in detail during the courtship of your relationship, the odds are that your ironclad prenup are going to hit your partner like a bucket of cold water. In addition, the implication of such a prenup is that if the other party doesn’t sign, then the relationship is over. The odds are that your would-be spouse will sign, but only because they have been coerced into doing so, and didn’t want to sacrifice the relationship over a piece of paper. But their feelings will be forever changed by that disheartening experience.

Prenuptial agreements can encourage dishonesty.

If your prenuptial agreement is structured so that breeches of trust penalize a spouse—again, this is only relevant in states that assign fault in divorces—you effectively incentivize your spouse to be dishonest. Why would a spouse admit that he or she is having misgivings about the marriage, if those admissions could pose a serious legal liability?

Fidelity clauses don’t discourage infidelity; they discourage communication. If you truly care about the health of your marriage, avoid the use of fidelity clauses. If nothing else, divorce is already a messy and painful process. This sort of clause only heightens the potential for those emotions.

Prenups tend to be imbalanced in how they treat the signers, which creates a power dynamic.

Occasionally, the desire for a prenuptial agreement is mutual. Both partners are very well off, or one partner may make a great deal of money, while the other is more modestly employed but stands to inherit a great deal of money down the line. Either way, this is probably the most ideal situation for a prenuptial agreement, as both parties have a lot to protect, and a lot to lose.

But most prenuptial agreements are inherently imbalanced in how the two parties are treated, because only one of them has assets that need to be protected, while the other does not. Essentially, prenuptial agreements serve to divide the haves (and their assets) from the have-nots.

If you’re looking to enter into a long-term relationship with someone, the desire to protect your belongings should be balanced by your desire to ensure their well-being. If a prenuptial agreement is necessary, including provisions that make it clear that your significant other will be treated with respect and fairness when it comes to dividing the estate will go a long way towards ensuring the soundness of your relationship.

Prenuptials often reflect the influence of people outside the relationship.

When one partner comes from ‘old money,’ it’s not unusual for there to be a parent in their ear, pushing the need for a prenuptial to protect the family fortune. This can also happen when a parent still relates to their son or daughter as a child, and thus feels the need to ‘protect’ them, legally speaking. If a parent or other family member is allowed to have a significant influence on the prenuptial, it’s likely that they’ll continue to wield that influence in the marriage itself.

If you want to give your marriage the best possible chance at success, make sure that the only people making decisions about the relationship are the two people in that relationship. Otherwise, you’re setting yourself up for an unhappy situation in which family members continuously meddle in all aspects of the relationship.

Whether you choose to have a prenuptial agreement or not, make sure that the health of the marriage is the first priority.

Prenuptial agreements can be good or bad, depending on the circumstances. However, they are a legal vehicle that is often mishandled or abused, to the detriment of all involved. If you are considering a prenuptial agreement, make sure you talk to your partner about your thoughts early in the relationship and consult with an attorney.

Educate yourself about marriage laws in your state. Many states have laws that are very fair in accounting for factors such as how much money each person brought to the relationship, the length of the marriage, the investments of time and money that each person put into the marriage, and so on. Courts are not out to rip you off. If you have questions about how your state handles the division of shared estates during divorce, consult with a knowledgeable lawyer who can advise you as to the best course of action in your case.