Who Needs a Prenup?

The Short Answer: Every Couple

Since ruling BA'M 5620/24 (June 2025), which established that even assets acquired before marriage may be subject to division, a prenup has transformed from "an option for wealthy people" to a basic protection tool for every couple in Israel. Whether you own an apartment, a business, or nothing at all - the agreement sets the rules in advance.

Business Owners

If you own a business - an LLC, a sole proprietorship, a partnership, or a startup - a prenup is critical. Without one, the appreciation in value of the business during the marriage may be considered joint property. In a divorce, your spouse could claim up to half of the business value, potentially forcing the sale of business assets, taking out loans, or even closing the business.

Special protection is also needed for:

• Stock options (ESOP, RSU) - common in the tech industry
• Intellectual property (IP) - patents, trademarks, software
• Business goodwill - value built over years

Tech Workers

Israel's tech industry creates significant wealth through options, RSU shares, bonuses, and profit-sharing. Without a prenup, these assets may be subject to division. A prenup allows you to define precisely which compensation components remain personal property and which are shared.

Second Marriages

When there are children from a previous marriage, a prenup protects their rights. Without an agreement, inheritances intended for children from a first marriage may become commingled with the joint property of the new marriage. A prenup ensures each party retains the assets they brought into the new marriage, while protecting the children's interests.

In second marriages, the agreement also addresses:

• Division of a residence purchased before the second marriage
• Protection of pension funds accumulated from a first marriage
• Securing future inheritances for children from a previous relationship

Common-Law Partners

A prenup is especially important for common-law partners (yeduim betzibur). The Property Relations Between Spouses Law, 1973 applies fully only to married couples. Common-law partners do not benefit from the law's default provisions, and in the event of separation, the court determines property division based on the "presumption of sharing" - a lengthy, expensive, and unpredictable process.

Olim and Foreign Citizens

New immigrants face unique challenges:

• FATCA - US citizens must report taxes to the US as well, and sharing assets could create tax liabilities in both countries
• Foreign prenups - An agreement signed abroad is not necessarily valid in Israel. You must ensure the agreement complies with Israeli law requirements
• Assets abroad - Apartments, bank accounts, and pension rights in other countries require explicit treatment in the agreement

Young Couples Without Assets

Even if you currently own nothing, a prenup sets the rules for the future. The cost is low (590 NIS on Noberu), and the process is simple. The moment you purchase an apartment, receive an inheritance, or one of you starts a business - the agreement will already be in place to protect you.

When Might a Prenup Not Be Appropriate?

Situations where a prenup may not be suitable are extremely rare. However, if one party is under duress, if there is a significant power imbalance, or if one party does not understand the contents of the agreement - you should seek personal legal advice before signing. A prenup must be signed of free will and with full understanding.