How Much Does a Prenup Cost?
While asking for a prenuptial agreement — more informally known as a prenup — is hardly a romantic gesture, these private agreements between engaged couples are a financially important part of wedding prep. A prenup breaks down how each person’s assets and property will be divided and whether spousal support, or alimony, will be provided should the union end in divorce.
But how much does a prenup cost, and is it really worth the trouble? Click below to learn more:
- How much does a prenup cost?
- When should you get a prenup?
- Benefits and drawbacks of a prenup
- Paying for prenup costs with a loan
- Is the cost of a prenup worth it?
How much does a prenup cost?
There’s a reason we think of prenups as being for only the rich and famous: They’re pricey, ranging anywhere from a couple thousand dollars to more than $20,000. But your costs may vary depending on several factors, including your location.
Attorneys are required for the prenup
If a couple wants their prenup to be considered valid by a court judge later, it’s essential that they each have their own attorney, from separate law firms, represent them during the prenuptial agreement negotiations.
“A lawyer can’t represent two people in conflict with each other,” said Marzano-Lesnevich, a matrimonial attorney with Madeline Marzona-Lesnevich. “For instance, one partner may want to provide no alimony, but the other could be planning on giving up his or her career to care for their children. That’s an inherent conflict and a lawyer can’t protect both their interests.”
Additionally, failing to hire independent counsel could result in the prenup being deemed unenforceable, as many states require both parties to do so. For instance, California’s Uniform Premarital Agreement Act mandates that a prenup can be enforced only if each spouse was represented by a lawyer.
Other factors affecting prenup costs
Besides dual legal fees, there are several other factors that could drive your costs up. This includes:
- Your location, as you’ll typically pay more for a prenup in places with higher costs of living
- The complexity of your financial situation and the types of assets that need to be dealt with
- How quickly you need the prenup to be completed
- The length of the negotiation process between you and your partner
- How compliant you and your partner are when it comes to accurately disclosing all financial information to each other
While hiring a qualified attorney is your safest bet to having an airtight prenup, there are several cheaper, more DIY-type options that you could consider. For instance, Rocket Lawyer offers prenuptial agreement forms you could fill out for a fee of $39.99 per document, though you will likely still want a lawyer to review the agreement to make sure it is enforceable. LegalZoom offers a prenuptial package for $1,495 that includes a drafted agreement and an evaluation by an independent attorney.
When should you get a prenup?
Before you tie the knot, you’ll need to have your prenuptial agreement drafted and signed by both partners. (It may even make sense for you to include the prenup in your wedding budget.) If you wait until after your vows, you’ll complete a postnuptial agreement.
But how far in advance you complete your prenup could have a huge impact on how likely a court is to enforce it.
For instance, in California, at least seven days must pass between signing a prenup and the wedding for it to be considered enforceable. While many other states don’t have such a clear time marker, courts tend to consider whether it was executed at the eleventh hour when your partner might have felt forced to sign it for fear of having the marriage called off. Marzano-Lesnevich noted that some firms may not even represent you if you wait until the last minute to finalize your prenup.
The earlier in your engagement that you can complete the prenup the better off you’ll be from a legal and monetary standpoint. The latest you should start the process is six months before the wedding date, said Marzano-Lesnevich, as it usually takes at least three months to negotiate, draft and sign the document.
Benefits and drawbacks of a prenup
Benefits of a prenup
- It can ensure that your business practice or interests are not divided between you and your spouse, if you split.
- It can protect the inheritance rights of any children from a previous relationship.
- It can prevent one spouse from having to assume the debt obligations of the other.
- It can limit the amount of spousal support or alimony one spouse would have to pay to the other once divorced.
- It can make couples more knowledgeable of each other’s financial situation and force difficult money conversations to happen before marriage since prenups require full disclosure of all assets and debts.
- It also can make the divorce process much simpler and the cost of a divorce cheaper, if you do split. “What you spent on the prenup, you’ll easily save on the divorce,” said Marzano-Lesnevich.
Drawbacks of a prenup
- It could cause resentment, hurt feelings and loss of trust between you and your partner, especially if brought up at the last minute.
- It cannot address custody rights of children or limit child support.
- It doesn’t allow for the possibility of change. “You don’t know what the future holds,” said Marzano-Lesnevich. “You could agree to something, say to go your own way and waive spousal support, if you divorce, and then you become ill or disabled. You’re still committed to the decision you made based on the circumstances at the moment you signed it.”
- It may require you to give up your inheritance rights or forgo any share of the increased value of your spouse’s business, even if you contributed to that success.
- You may not be able to sustain your usual lifestyle post-divorce if you agreed to limited spousal support.
Paying for prenup costs with a loan
Since legal fees can quickly grow to thousands of dollars, you might not have the full funds necessary in your savings to pay attorney costs right now—especially if you’re also planning an expensive wedding.
But if a prenup is important to you, there are financing options available that can cover you in the short term. Additionally, you may want to look at ways to save on your wedding if you feel this is a cost that’s worthwhile. Paying with cash is always a better option than taking on debt, especially as you start your lives together as newlyweds.
You can borrow money from a bank, credit union or online lender to help pay for your prenup. Personal loans are usually unsecured, meaning they are not backed by collateral such as a home or car, and are paid back in fixed monthly payments with interest.
Depending on your income, credit score and the amount borrowed, interest rates can range widely from as low as 4% all the way up into the triple-digits. Those with better credit scores typically get lower rates.
Some personal loans also may come with origination fees, which are separate from the interest rate you’ll be charged and can be between 1% and 8% of the total loan amount.
Another option is to apply for a credit card with a 0% introductory interest rate. If you have good enough credit to qualify for these promotional offers, these cards allow you to bankroll purchases and pay them off over the course of six to 21 months at no additional expense, often while still earning rewards or an introductory bonus.
However, you need to pay off the balance in full by the end of your promo period or you’ll end up owing a hefty sum, as these cards can charge variable interest rates as high as 27%. Some cards will even charge you back interest if you carry a balance through the promotional period.
Some law firms allow clients to pay over time rather than in one lump sum. Under such a payment plan, you’ll make an initial down payment and then subsequent fixed payments, usually taken as an automatic deduction from a personal account, credit card or debit card, until the bill is fully paid. Depending on the firm, you might need to pay once a month, bi-weekly or on a customized timeline.
Is the cost of a prenup worth it?
Determining if the expense of a prenup makes sense for you and your partner largely comes down to your past relationship experiences, your current wealth and whether there are any big income or debt disparities between you and your partner.
Marzano-Lesnevich noted that prenups are most useful for people who have been married previously, have accumulated sizeable property or assets independently, own or share a stake in a business or are marrying someone with significantly less assets or a far lower income than they have.
When it comes to covering the cost of a prenup, be mindful of your personal financial situation and weigh the importance of this security over other costs of planning a wedding. Ultimately, the prenup provides financial peace of mind should your happily ever after not go as smoothly as you’d hoped.