Use our prenuptial agreement to detail how you and your partner will treat your wealth and belongings if your marriage ends.
Updated August 19, 2024
Written by Sara Hostelley | Reviewed by Brooke Davis
A prenuptial agreement (or “prenup”) is a contract couples enter into before marriage to define each spouse’s financial and property rights should the marriage end in death or divorce.
While wealthy individuals typically use the agreement, people in all financial situations can outline terms to benefit themselves and their relationship with their partners.
A prenuptial agreement is a marriage agreement that outlines the financial and property rights of a couple if they ever separate due to divorce or death.
It protects each spouse’s assets and financial interests. Partners can write this agreement before they get married while still on good terms. This way, if arguments or disagreements arise later in their marriage, they’ve already clarified their financial rights and responsibilities and can reference them when separating.
A prenup can also be useful in the unfortunate instance of one spouse’s death. It clarifies estate distribution, protects the living spouse, safeguards personal/family assets, and avoids state default laws.
Prenups can help spouses avoid expensive and lengthy disputes during a divorce.
All couples entering marriage should consider a prenup, but here are some examples of people who can especially benefit from a prenup:
If you decide to end your marriage without a prenup, you will likely need to use a divorce agreement to determine how to divide your assets.
Alternatively, there is a cohabitation agreement for couples who wish to live together but not get married. Because of the complicated case law surrounding unmarried partners, you should check with an attorney if you want to create this document.
Here are the elements to address in a prenup:
Ensure to state both parties’ full names to clarify to whom the agreement pertains. Ensure each party discloses their assets and debts.
Each party must disclose all their assets and debts. Failure to do so may make the prenup unenforceable.
In a divorce, the court will generally divide marital property between both parties but exclude assets the parties have declared as “separate property” or “non-marital property.” However, blending or mixing the separate property may cause it to lose its independence during the marriage.
A couple can use a prenuptial agreement to designate which partner gets what in case of a divorce, regardless of commingling.
Separate or non-marital property includes:
Anything either partner acquires during marriage is usually shared marital property that belongs equally to each partner. However, a couple can use a prenup agreement to exclude specific property from being considered marital or “community property.”
Marital property includes:
If one spouse began a business before getting married, the other spouse might be entitled to 50% of any increased value in the business that occurred during the marriage.
However, with a prenup, business owners can designate the status of a business owned before marriage as separate property. In the event of a divorce, this agreement would ensure that the business owner possesses exclusive rights to the company.
Couples can use prenuptial agreements to make concrete future financial plans together and decide how to invest, save, and spend their money.
For example, each spouse can agree to contribute a certain amount of money into joint bank accounts or determine a regular spending allowance. Similarly, a prenuptial agreement can clarify whether the spouses will pay for joint household expenses, like a mortgage, from separate or joint bank accounts.
A prenuptial agreement can explicitly determine whether the more disadvantaged partner will receive financial support if the marriage ends. However, state laws vary on whether a spouse can waive the right to receive alimony or spousal support.
When determining alimony, a judge and spouse may consider the following:
Example:
Michael is a high-earning executive, and his spouse, Laura, is a freelance writer with a fluctuating income. They decide to waive alimony in their prenuptial agreement, acknowledging that Laura’s income may not be stable but agreeing that each will be financially independent post-divorce. However, they include a clause that allows Laura to request spousal support if she cannot support herself due to unforeseen circumstances like illness or loss of income.
If one partner has children from another relationship, a prenup can ensure that separate premarital property is shared with these children. Even when a will exists, prenup agreements can clarify and reinforce expectations to avoid costly legal battles that ultimately eat away at the estate.
Note: You cannot use a prenuptial agreement for unborn children from a new marriage.
Clarify if the spouses will assume each other’s debt that they had before entering marriage. You can also define how you wish to divide debts that partners incur during the marriage.
Example:
Jessica had $50,000 in student loans before marrying Mark, who is debt-free. Their prenuptial agreement includes a clause that states Jessica’s pre-marital debt will remain her responsibility in the event of a divorce, protecting Mark from being liable for her educational expenses. If Jessica accrues additional debt during the marriage, they agree to split it equally.
Many states have adopted their own version of the Uniform Premarital Agreement Act (UPAA), which governs the creation and enforceability of prenups. Other states haven’t adopted this act, so they follow state-specific provisions.
Each state has specific requirements for prenups, so you can consult with an attorney when creating yours to ensure compliance. However, many have similar requirements for prenups’ validity, some of which include the following:
Here are some conditions that can void a prenup:
Provide the information of both parties. The document will split this information between the first and second spouses.
Include their full name and address as part of the contact information in the agreement. In later sections, you must also have the spouses’ marital backgrounds, legal representation, and financial disclosures.
Both spouses need to disclose whether they have been married before and/or if they have children.
You can designate all prior properties as separate, shared, or a mix of both. For anything acquired before marriage, you can:
When you get married, discuss how you will share the property that either party acquires during the marriage:
Example:
During their marriage, Tom and Lisa purchase a vacation home together. Their prenup specifies that this property will be classified as marital property and divided equally if they divorce. They further agree that if one spouse decides to keep the property, that spouse will compensate the other based on the current market value at the time of divorce.
You can establish property division by percentages. For example, both parties may receive 50%, or one party may receive a higher percentage if they contributed more during the marriage.
Another option is to divide property according to state law. A judge will decide if the couple cannot agree on dividing the property.
Usually, a court will divide the property equitably or fairly based on various factors if the parties do not specify how to divide such property.
If you own a business before marriage, you can choose whether to share any future increase in the value of a company during the marriage.
Here’s an example where one spouse chooses to share the increased value of a business they own before marriage with their spouse:
Steve already owns a business worth $100,000. He decides to get married to Betty and share the appreciation of the value of his business equally. Ten years later, the company is worth $1,000,000.
The appreciation in value is $900,000. According to the prenup, Betty gets $450,000 of this increase, and Steve receives $450,000.
As their marriage continues, they will continue to split the appreciation of value equally.
If you or your spouse starts or inherits a business during the marriage, you can choose whether to share any future increase in the company’s value during the marriage.
When it comes to dividing the rise in value, you have the following options:
For example, suppose you and your spouse start a business worth $100,000 while married. You decide to share any appreciation of the company’s value equally in case of a divorce.
Four years later, the business is now worth $500,000. The appreciation in value is $400,000. Unfortunately, the marriage ended after those four years. According to the prenup, your spouse gets $200,000 of this increase, and you receive the other half.
Suppose you have any outstanding loans or financial obligations before getting married. You and your partner can decide whether these debts will remain only one person’s responsibility or whether both of you are responsible for repaying debts after marriage.
Here are some of the ways you can treat either party’s debts before marriage:
Suppose you accrue debts, loans, or financial obligations during your marriage. In that case, you and your partner can decide whether these debts will remain only one person’s responsibility or whether you will share the responsibility in a divorce or separation.
You can set the debt division by percentages (i.e., both parties receive 50% of the marriage’s debt obligations). The second option is to divide debt according to state law.
If the couple cannot decide how to divide the debt, the couple will need to go to court, and the judge will determine the division.
You can file “Married Filing Jointly” or “Married Filing Separately.” Filing jointly exposes you to 100% of any future joint liabilities if your spouse has unreported income or other tax debts. Often, you and your spouse may pay fewer taxes by filing jointly.
Specify how you’ll divide the marital home if the marriage ends. If you decide to divide the marital home, then you have the following options:
Specify how you and your spouse will share household expenses during the marriage. If you decide to divide household expenses, you have the following options:
Alimony, or spousal support or separate maintenance, is money one spouse pays to the other after a separation or divorce.
The payments help support a spouse after marriage, especially if one spouse becomes incapacitated or stops their career from caring for children or a family business.
Here are some factors that may cause the alimony amount to vary:
If both parties agree, they can calculate the alimony amount one will provide to the other. A court will still have to ensure the amount is reasonable and fair.
Most states allow you to waive the right to alimony in a prenuptial agreement, while some states do not. To ensure that your decision is enforceable by a court, please double-check your state law or consult an attorney.
You can include provisions relating to your spouse about what happens if one of you becomes disabled or dies. These can include:
Additional clauses may include items such as a sunset provision. A sunset provision allows a prenup to expire on a specific date or after a particular event. For example, a prenuptial agreement could expire after five years of marriage or after a child is born.
Lifestyle clauses and infidelity clauses are generally unenforceable. For example, requiring your partner to maintain a certain weight, limiting the number of in-law visits, or having penalties for infidelity are usually not enforceable in a court of law.
Prenuptial agreements do not cover child support, custody, or visitation rights for future unborn children. For example, you cannot agree that your future children will live with one spouse before marriage.
In a separation, the court will decide the child’s best interest. However, a prenuptial agreement can be useful for providing financial support for children from a previous marriage.
Example:
A prenuptial agreement between Emily and David includes a sunset provision that expires after 10 years of marriage. If they are married for a decade, the prenup no longer applies, and any assets accumulated afterward are treated as marital property under state laws.
The law requires “full and fair disclosure” to enforce a prenup, so each person must fully disclose their financial affairs and include all relevant information. For example, you should share all financial information like bank statements, retirement accounts, credit card balances, and any outstanding debts or loans.
Each spouse should attach information regarding their net worth, assets, income, holdings, liabilities, and debts.
In the event a dispute arises, you have the following options to deal with them:
You should have a notary public notarize your prenuptial agreement. Ensure you include the state and county where the parties have notarized the document.
You should specify which state laws the agreement will follow. For example, if you get married in California, the default is that the laws of California will apply to the prenuptial agreement if there is a disagreement.
If you want a different set of state laws to apply, specify this preference in the agreement.
Download a free prenuptial agreement template in PDF or Word format below.
