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 separation, specifically by death or divorce.
While wealthy individuals typically use the agreement, people of all backgrounds can outline terms to benefit themselves and their relationship with their partners.
This page walks you through a prenup, how it works, and how to fill it out independently.
What Is a Prenuptial Agreement?
A prenuptial agreement is a marriage agreement that outlines the financial and property rights of a couple should they ever divorce. This includes:
- Separate or Non-marital Property
- Marital Property (i.e., community or common law property)
- Business Ownership
- Savings and Retirement
- Alimony and Spousal Support
Separate Property / Non-Marital Property
In a divorce, the court will generally divide marital property between both parties but exclude assets known as “separate property” or “non-marital property.” However, blending—or mixing—the separate property may cause it to lose its independence during 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:
- Premarital property (property individually acquired before marriage)
- Any inheritance or gift received from a third party during the marriage
- Compensation from most personal injury awards
- Property acquired after separation
Anything acquired during marriage by either partner is generally regarded as 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:
- Earnings by each spouse during the marriage
- Property bought using either spouse’s earnings during marriage
- Separate property that has commingled with other marital property (e.g., an individual bank account in which both spouses deposit funds)
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.
Savings and Retirement Goals
Couples can use prenuptial agreements to make concrete future financial plans together and decide how to invest, save, or 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 joint household expenses, like a mortgage, will be paid from separate or joint bank accounts.
Alimony and Spousal Support
A prenuptial agreement can explicitly determine whether the more disadvantaged partner will or will not receive financial support. However, state laws vary on whether a spouse can waive or give up the right to receive alimony or spousal support.
When determining alimony, a judge and spouse may consider the following:
- If there is no spousal support, will the spouse become destitute and unable to provide for themselves?
- Does the poorer spouse have limited business experience?
- Did the wealthier spouse fully disclose all their assets and wealth?
- Did the disadvantaged partner truly understand the rights they were giving up?
Children from a Previous Relationship
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.
As the division of property in divorce cases can become quite complex and contentious, couples who decide to create a prenuptial agreement can avoid stress and reduce time spent in court if they choose to dissolve their marriage in the future.
However, 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 one of these.
How Does a Prenup Work?
A prenup is a legal contract involving property division under marriage laws. Many states, such as California, follow the Uniform Premarital Agreement Act (UPAA), which sets out specific rules and guidelines for anyone creating a premarital agreement.
Financial disclosure: The document must indicate that the parties have fully, fairly, and honestly disclosed all their financial information to one another.
Opportunity for legal counsel: Either separate attorneys must represent both parties, or the unrepresented party must indicate in the document that they had a chance to consult independent counsel and chose not to.
Waiting period: In some states, such as California, a state-mandated waiting period must occur between the parties receiving and signing the document. For example, in California, the waiting period is seven days.
Fair and Reasonable Terms: A contract considered “unconscionable” by the courts is grossly unfair or contains unreasonable or impossible terms. The courts will not enforce such a contract.
Signatures and Notarization: The requirements vary from state to state, but both parties must sign the prenuptial agreement. The document must also be notarized and witnessed by at least one impartial party, such as a notary public.
Each state has specific requirements, so check with your state or consult a licensed attorney to ensure you have created the document correctly.
Common Prenuptial Agreement Clauses
You can include many clauses in a prenuptial agreement, ranging from property division to spousal support and child provisions. Some of the most common clauses are below:
Identification of Debts and Assets.
Identify separate property and significant debts owned by each spouse before the marriage to ensure they keep ownership in the event of a divorce. Under most marriage laws, ownership of separate property ends at the beginning of the marriage.
A divorce case can become contentious if a spouse needs to prove ownership of specific assets. So, prenups are crucial for establishing your rights to your property.
In most states, anything acquired or earned during the marriage becomes the property of both parties. States like California, which follows community property law, will divide property in a 50/50 split when you get a divorce.
The premarital agreement will clarify if you and your spouse want to divide community property differently.
Both parties can agree to a set amount for spousal support or waive it entirely by mutual consent. However, both parties should be aware that circumstances may change.
The court will often not enforce a prenup if it severely disadvantages one party, even if they voluntarily and knowingly entered into the agreement.
For example, suppose a woman agrees to waive alimony, and the husband later divorces her, leaving the woman with no job and no source of income; the court may still require the husband to provide spousal support.
The Infidelity Clause
Some prenuptial agreements may include a morality clause, such as an infidelity clause. If a party discovers their spouse is having an extramarital affair, the cheating spouse must award the injured party compensation like a monetary sum.
Such a clause is uncommon, and most states will be reluctant to enforce it since the document has inherent difficulty in proving infidelity in court due to unclear wording.
For example, you need to clearly define acts of infidelity in the agreement and detail the means to prove it. Including such a clause can cause more harm than good in a marriage.
You should consult a family law attorney to help you use the correct wording to include this clause in the agreement.
How To Write a Prenuptial Agreement
Step 1 – Include Information from Both Parties
The first step in writing a prenuptial agreement is providing 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 listed on 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. If you have children from another relationship, you can ensure that separate premarital property is shared with these children.
Even when a will exists, a prenuptial agreement can clarify and reinforce expectations to avoid costly legal battles that ultimately eat away at the estate.
Step 2 – Decide on Property
Property Owned Before Marriage
You can designate all prior property as separate, shared, or a mix of both. For anything acquired before marriage, you can:
- Keep it separate so that one person only owns it.
- Keep some as individual property and designate some as shared marital property.
- Designate it as shared marital property, so both are owners.
Property Acquired During Marriage
When you get married, you will have to discuss with your spouse how you will share the property that either party acquires during the marriage:
- Keep all property acquired and owned by each individual during marriage separate so no property will be marital property
- Keep all property acquired and owned by each individual during marriage separate, except for items specified as marital property.
- Property acquired during marriage under one party is considered marital property and shared between the two parties.
Division of Marital Property
Property division can be set by percentages (i.e., first-party 50% and second-party 50%). Another option is to divide property according to state law. A judge will decide if the couple cannot agree on dividing the property.
Usually, the property will be divided equitably or fairly based on various factors if the parties do not specify how the property will be split.
Step 3 – Decide on Business
Business Owned Before Marriage
If you own a business BEFORE marriage, you can choose to share or not 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 their 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.
Business Acquired During Marriage
If you or your spouse starts or inherits a business DURING marriage, you can choose to share or not share any future increase in the company’s value during the marriage.
When it comes to how the rise in value will be divided, you have the following options:
- Granted to the first party
- Given to the second party
- Shared equally
- Divided by percentage
For example, 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 rest.
Step 4 – Agree on Debts and Taxes
Debt Owed Before Marriage
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.
You can decide the debts owed by either party before the marriage can be treated as one of the following:
- As each party’s separate debt
- Each party’s debt, with some exceptions
- As both parties’ shared marital debt
Debt Acquired During 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 share the responsibility in a divorce or separation.
Division of Marital Debt
The debt division can be set by percentages (i.e., the first party 50% and the second party 50%). The second option is to divide debt according to state law.
If the couple cannot decide on a way to divide the debt, the couple will need to go to court, and the judge will determine how the property should be divided.
Taxes During Marriage
You can file “Married Filing Jointly” or “Married Filing Separately when married.” 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.
Step 5 – Decide on Housing Arrangements
Specify how the marital home will be divided if the marriage ends. If you do decide to divide the marital home, then you have the following options:
- The first party’s separate property
- The second party’s separate property
- Both parties’ shared marital property
Division of Household Expenses
Specify how you and your spouse will share household expenses during the marriage. If you do decide to divide household expenses, then you have the following options:
- Paid entirely by the first party
- Paid entirely by the second party
- Paid equally by both parties
- Each party will pay specific expenses
Step 6 – Iron Out The Final Details
Waiver of Rights
Alimony, or spousal support or separate maintenance, is money paid to a spouse 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.
A variety of factors may determine the amount to be paid. Parties can calculate and specify the amount of alimony or spousal support provided.
For example, here are some factors that may cause the amount to vary:
- Each person’s current circumstances
- How long the couple was married
- Income level of each spouse
- If either person has medical needs
Most states allow you to waive the right to alimony in a prenuptial agreement, while a minority of states do not. To ensure that your decision is enforceable by a court, please double-check your state law or consult an attorney.
Disability & Death
You can include provisions relating to your spouse about what happens if one of you becomes disabled or dies. These can include:
- Providing support if the other party becomes disabled
- The right for one party to continue living in the marital home if the other spouse dies
- One party’s inheritance rights if the other party dies
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 used to provide for children from a previous marriage financially.
For example, you can agree before marriage that your property will be used to take care of children from your first marriage.
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 with your future spouse 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:
- Court litigation
- Mediation, then the arbitration
You should have your prenuptial agreement notarized by a notary public. Ensure you include the state and county where the parties have notarized the document.
Date and Governance
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 in the agreement.
Lastly, date the document.
What Should Be Included in a Prenuptial Agreement?
Some things you might want to list in your prenup besides your property and bank accounts could include:
Business Ownership/Partnership: Once a couple is married, any income derived from a business becomes community property, and the spouse may be entitled to half that income after a divorce.
If you want to separate the ownership or funds, list it in a prenup.
Retirement Plans and Insurance: In some states, an employee’s pension goes to their spouse upon death, regardless of divorce. The parties can agree to offset this payment in the prenup.
Other retirement plans and insurance companies pay the amount to the named beneficiary, and the parties should consider how they want to divide these assets in the event of a divorce.
Heirlooms and Gifts: Under marital property law, heirlooms and gifts given to a spouse are marital property. However, suppose you’d like to prevent specific property, such as a family ring, from being your spouse’s property after a divorce. In that case, you should specify this in your prenup.
Prenuptial Agreement Sample
Download this sample prenuptial agreement template in MS Word or PDF format below.
Frequently Asked Questions
Can I write a prenup without a lawyer?
Yes, you can write a prenup without a lawyer. It isn’t a legal requirement that you have one when writing the agreement, but you should at least hire a lawyer to review the document to ensure it follows your state’s requirements.
It is highly recommended that the document be considered valid in the court’s eyes for both parties to seek legal counsel when negotiating.
Otherwise, the court may feel that both parties do not fully understand the terms outlined in the document and decide not to uphold the agreement.
Do prenups hold up in court?
Yes, prenups hold up in court, provided the parties have followed the state’s legal requirements. The court will look at these elements:
- Is it in writing?
- Was it signed freely and voluntarily? (without coercion or duress)
- Was there full and fair disclosure of finances?
- Is it considered immoral? (i.e., grossly unfair to one party or contains unrealistic or unreasonable terms)
- Was it signed and notarized according to the state’s legal requirements?
- If the state has a waiting requirement, was that met?
Do both spouses need an attorney for the prenup to be legally binding?
You do not need a prenup lawyer for the agreement to be legally binding. If both partners choose not to have an attorney, they can waive the right to legal representation.
By waiving the right to get “independent legal advice” from an attorney representing each person, you both agree to the following statements:
- You both understand the contents of the document.
- You both believe it is fair and reasonable.
- You both acknowledge that you agreed voluntarily.
The courts are more likely to honor the prenup, and the spouses are less likely to make costly legal errors if both have an attorney representing their interests.
Courts might worry that the document is unfair if only one person has legal representation.
I have debts BEFORE entering my marriage. Will my debts be shared with my partner after we are married?
If 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 share the responsibility after marriage.
You have three options:
- Keeping your debts before marriage separate
- Designating your debts before marriage as shared
- Keeping everything separate, with exceptions
Can you get a prenup after marriage?
No, you can’t get a prenup after marriage because once the parties are married, a different set of rules regarding ownership and division of property comes into play.
A Postnuptial Agreement can be used after the parties are married. It divides property similarly and is subject to the same legal requirements as a prenuptial agreement.