Table of Contents
- Free Prenuptial Agreement Template and Sample
- The Definition: What is a Prenup?
- Is a Prenuptial Agreement Right for You?
- Why Use One? The Pros vs. the Cons
- How to Make Your Agreement Valid
- Common Questions to Ask Yourself
1. Download a Free Prenup Template
2. The Definition: What is a Prenup?
A prenuptial agreement is a written contract that is entered into before the couple gets married. Often referred to its abbreviated form, a “prenup” spells out what should happen if the marriage ends in separation like a death or divorce.
6 common questions that this document answers:
1. Do you want property that is acquired individually by either spouse BEFORE the marriage to remain separate?
(“separate premarital property” or “nonmarital property”)
If yes, anything that was acquired before marriage will continue to belong to that person. If you bought stocks for $100 before getting married, those stocks may be worth $1 million down the road, but that increase in value only belongs to you if there is a separation. Similarly, if you have $100,000 in pre-existing debt from college or graduate school, that debt continues to only belong to you and not your spouse. Further, if you receive an inheritance or gift from your beloved great grandmother while being married, that inheritance or gift will continue to be yours if there is a separation.
2. Do you want property that is acquired individually by either spouse DURING the marriage to be considered shared marital property?
If yes, anything that is acquired during marriage by one partner equally belongs to the other partner. If you two purchase a house together for $500,000 after getting married, you both own 50% of the house and its value if it appreciates to $1 million at the time of separation.
3. How do you want to handle the ownership of your business?
(mixed: some shared “marital property” and some separate “nonmarital property”)
If you own 100% of a business worth $50,000 before getting married, you can designate that your spouse-to-be will own 50% of the business. If your business booms with the help of your spouse to $500,000 during your marriage, you both own 50% of the increased value so you would get $225,000 each. However, if you want your business to be considered as nonmarital property, keep in mind that your spouse may be entitled to half of any increased value in the business that occurred during the marriage.
4. What are your savings and retirement goals?
The couple can make concrete future financial plans together and decide how they will 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 whether there will be a regular spending allowance. Similarly, a this document can clarify whether joint household expenses like a mortgage will be paid from separate or joint bank accounts.
5. How will alimony or spousal support be handled?
This document can explicitly determine that the more disadvantaged partner will or will not receive financial support. State laws, however, vary on whether a spouse can completely waive or give up the right to receive alimony or spousal support.
Here are some questions that both a judge and a loving spouse might consider when determining alimony:
- If there is no spousal support, will the spouse become a pauper?
- Does the poorer spouse have limited business experience?
- Did the richer spouse fully disclose all their assets and wealth?
- Did the disadvantaged partner truly understand the rights they were giving up?
6. How will children from a previous relationship be supported?
If one partner has children from another relationship, this document can ensure that separate premarital property is shared with these children. Even when a will exists, a prenuptial agreement form can clarify and reinforce expectations to avoid costly legal battles that ultimately eat away at the estate.
Note: This contract can’t be used for unborn children from a new marriage.
As a reference, people often call this document by other names:
- Antenuptial Agreement
- Domestic Contract
- Marriage Contract
- Premarital Agreement
In contrast to a premarital agreement, a postnuptial agreement is entered into after marriage, and a cohabitation agreement is entered into when two individuals want to live together but not get married.
3. Is a prenuptial agreement right for you?
I should use a prenup if:
- I was in a previous marriage
- I have children from another relationship
- there is a large difference in wealth or property
- one partner will stay at home and raise children
- there is a large difference in past or future earnings at work
- I am an owner or partner of a company, nonprofit, or business
- either my spouse or I have a large amount of personal debt
- you expect to receive or have already received an inheritance
- I am concerned about how my new marriage interacts with my estate
I shouldn’t use a prenup if:
- the prenup is heavily in favor of one party
- I am being coerced into signing the document
- my own lawyer has not looked it over
- neither spouse has sizable assets
- my spouse and I agree with our state’s default divorce laws
In the event that you decide to end your marriage, without a prenup you will likely need to use a Divorce Agreement to determine how to divide up your belongings.
Do same-sex couples need this document?
After the June 2015 Supreme Court ruling Obergefell v. Hodges, the IRS also weighed in on same-sex marriages for federal tax purposes now that same-sex marriage is legal nationwide. Even before the Supreme Court ruling, same-sex couples would benefit from this document, according to a 2013 Forbes article. If you live in a community property state, it can help each spouse keep their property and liabilities separate and avoid triggering their state’s default community property laws.
Discover the 5 Ways a Prenup Can Save Your Marriage and how to open the discussion.
4. Why use one? The pros vs. the cons
The Pros: A Premarital Agreement can…
- Serve as a form of marriage insurance
- Settle any major financial concerns before the marriage
- Protect your business from being split between you and your ex-spouse
- Prevent you from taking on your spouse’s debt
- Safeguard the inheritance of your children from a previous marriage
- Protect your financial and property assets acquired before the marriage
- Help you avoid costly litigation fees in the event of a divorce
- Help the couple practice communicating and negotiating important issues in the relationship
- Prevents you from being entitled to a portion of your spouse’s estate or inheritance
- You may not be entitled to a share of the increased value of your spouse’s business even if you helped contribute to that growth
- You may risk damaging the level of trust within the relationship and increase suspicions between the couple
- A premarital agreement cannot anticipate every potential financial issue throughout the marriage and could end up complicating things if circumstances change
- Depending on the laws of your state, your agreement could still be overturned in court
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Remember, the list above is not exhaustive. There are many other agreements couples can make in a prenuptial agreement.
5. How to make your agreement valid
In order to be enforceable in court, a prenuptial agreement should meet five basic requirements. Here’s how to get a prenup that is valid:
- must be in writing
- must be signed voluntarily (free of duress or undue pressure)
- must have been signed after full and fair disclosure
- must not be unconscionable (must be fair and reasonable)
- must be signed by both individuals before a witness and notary public
Start conversations about this document well in advance of the wedding day. If it is signed less than 24 hours before a wedding, the court may reasonably find that one spouse unwillingly signed under pressure.
To avoid a legal hassle, your document should address the following concerns, and avoid the following legal issues:
Top 2 Concerns a Prenup Should Address
1. Governing Law
If the agreement is challenged, the default is that the laws of the state where you are getting divorced apply if you meet the state’s residency requirements (i.e. 6 weeks or 6 months), if any. If you want the laws of the state where you were married to apply, you must specify this in your document.
Some couples may agree that the premarital agreement should expire after a certain number of years or after a child is born. State laws sometime reflect a similar treatment of divorces between couples married for a short time or with no children. In California, for example, summary dissolution serves an expedited divorce process for couples married for less than five years and with no children, among other factors.
Top 2 Legal Issues You Should Avoid
1. Lifestyle Clauses
Lifestyle clauses are clauses written into an agreement which outline how the individuals should behave during their marriage, or outline the decisions they have made concerning such matters as in-laws, religion, the upbringing of children and even infidelity.
Laws relating to these agreements, and therefore lifestyle clauses are state-dependent. Therefore, if you are considering including a lifestyle clause you should first check your state laws to ensure they are legally admissible and enforceable.
The enforceability of a lifestyle agreement is dependent on both the state’s laws and whether the court considers the clause to be fair and legally-sound (and thus, legally enforceable). Although many states do not enforce lifestyle agreements, many couples choose to include them to help guide their behavior and decisions in their marriage.
If you’re unsure about the legality of lifestyle clauses in your state, or have any further questions, it is best to consult a lawyer before including these clauses in your agreement.
2. Contrary to Public Policy
The law favors stable marriages in society. Therefore, you are not allowed to “buy” a divorce in a prenuptial agreement. For instance, you cannot include a provision that you will make a lump sum payment to get out of a marriage.
The prenuptial agreement sample below details a contract between ‘Johnny Appleseed’ and ‘Penelope Bucksworth.’ The couple agrees to maintain separate ownership of all property that they acquired before the marriage. However, all property acquired individually during the marriage will be treated as marital property and owned by both Johnny and Penelope.
6. Common Questions to Ask Yourself
Click on any question to expand the answer.
A. Lifestyle clauses are clauses written into a prenuptial agreement which outline how the individuals should behave during their marriage, or outline the decisions they have made concerning such matters as in-laws, religion, the upbringing of children and even infidelity.
Laws relating to prenuptial agreements, and therefore lifestyle clauses vary from state to state. As such, if you are considering including a lifestyle clause in your prenuptial agreement it is essential you first check your state laws to ensure they are legally admissible and enforceable.
If you are unsure about about the inclusion of lifestyle clauses in your prenup, it is best to consult a lawyer.
A. Include each person’s full name and address as part of the contact information to be listed on the agreement. You will also need to include the following information in later sections:
- Marital background
- previous marriages
- Legal representation
- attorney names
- attorney addresses
- Financial disclosures
- bank accounts
- debts or loans
- business ownership
- retirement accounts
- credit card balances
A. The abbreviated names are shortened names that will be used to refer to the each spouse throughout the document. For example, if one spouse’s name is “John Doe,” you may choose “John” or “JD” as the abbreviation that will be used throughout the document.
A. Yes, both spouses need to disclose whether they have been married before and/or if they have children on their premarital agreement.
If one spouse has children from another relationship, a this agreement can ensure that their separate premarital property is shared only with their children when that spouse dies.
Even when a will exists, a premarital agreement can clarify and reinforce expectations to avoid costly legal battles that ultimately eat away at the estate.
Here’s a real life example.
John has one son from a previous marriage. John owns a $50,000 antique car that he wants to give to his son as an inheritance. John is getting remarried, and wants to ensure that when he dies, the $50,000 car will belong to his son. Including his son in the agreement will clarify that only his son will inherit the $50,000 antique car.
Even when a will exists, this agreement can clarify and reinforce expectations to avoid costly legal battles.
A. The date and location of the wedding indicates the official start date of the marriage of both partners. After the marriage date, the prenuptial agreement becomes legally binding. If either spouse does not have this information on hand, it can be left blank to be filled in later.
Marriage Plan & Legal Representation Questions
You do not need an attorney for the document to be legally binding. If both of you choose not to have an attorney, you can both 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 prenup.
- You both believe it is fair and reasonable.
- You both acknowledge that you entered into the agreement voluntarily.
Courts may be worried that the document is not fair if only one person had legal representation.
Ideally, both spouses have an attorney representing their interests. This way, the courts are more likely to honor the agreement, and the spouses are less likely to make costly legal errors.
Marital property is any asset owned by both partners. For instance, if you and your spouse purchased a home and share ownership of the property, it would be considered marital property. Specifying marital property is important because separation or divorce disputes will determine how marital property will be distributed between the two parties. The prenuptial agreement allows couples to agree before marriage what property is designated as marital property.
In contrast, non-marital property is the property that you do not want to be considered “shared” between the couple. Your spouse will not have ownership/liability in any way. You can specify in the agreement the property that you do not want to be considered marital property, so that only one person will have ownership/liability. In case of divorce, non-marital property is not subject to division and remains the sole property of the individual.
A. The division of property can be set by percentages (i.e. first party 50% and second party 50%). Another option is to divide property according to state law. If the couple cannot agree on how to divide property, a judge will decide for them. Usually, property will be divided equitably or fairly based on various factors if the parties did not specify how the property will be split.
Click the following link for information about which state laws would govern your divorce proceedings.
A. Tenants in common refer to shared ownership of property by two or more people; it can be shared equally or unequally. If one party dies, the property transfers to the decedent’s heirs.
A. You can choose from four options:
- Grant the appreciation in value to the first spouse entirely
- Grant the appreciation in value to the second spouse entirely
- Share the appreciation equally, or
- Share the appreciation by a percentage
For example, let’s say you own a business worth $100,000 before marriage. In this document, you decide to share the appreciation in value equally. Your business appreciates in value to $200,000.
That is a $100,000 appreciation. If your marriage unfortunately ends, you would split the appreciated value, meaning you each get $50,000.
A. The law usually treats pets as personal property with no special status. Some courts, however, treat pets like children and apply a similar “best interests of the pet” consideration.
Pet custody would therefore be likely awarded to the person who has provided basic daily needs like food, medical attention via a veterinarian, social interaction with other animals, appropriate supervision under state and local regulations (like a dog license or complying with off-on leashing rules), and financial support.
Marital Debt Questions
A. Marital debt includes any financial obligations jointly shared by both you and your partner because of marriage. Each of you are liable for marital debt, even if only one person originally incurred the debt.
A. If you accrue debts, loans or financial obligations during your marriage, you and your partner can decide whether these debts will remain only one person’s responsibility or whether both of you share the responsibility in the event of a divorce.
You have three options:
- Keeping your debts accrued during marriage separate
- Designating your debts accrued during marriage as shared
- Keeping everything separate, with exceptions
For example, Alex and Casey are married, and have agreed to designate all debts accrued during marriage as shared. Alex takes out a $30,000 student loan, and Casey remains debt-free. Alex’s $30,000 loan thus becomes shared marital debt. This means that Casey agrees that he is also responsible for Alex’s loans, even in the event of a divorce. Even more, Casey is agreeing that creditors would be able to go after Casey for the student loan money Alex owes.
A. The division of debt can be set by percentages (i.e. the first party 50% and second party 50%). The second option is to divide debt in accordance to state law. If the couple cannot decide on a way to divide debt, the couple will need to go to court, and the judge will decide how the property should be divided. Usually, property will be divided equitably or fairly based on various factors if the parties did not specify how the property will be split.
Click the following link for more information about how your state will govern a divorce.
Housing and Housing Arrangements
A. You can decide in the agreement what counts as regular living expenses, and what does not.
Items commonly considered to be regular living expenses:
Items commonly NOT considered to be regular living expenses:
- Cellular phone
- Gasoline for car or truck
- Entertainment (movies, baseball games, etc.)
If you or your spouse owns a residence (either separately or shared), you can indicate in the contract how you want the ownership to be affected. You can decide whether to keep ownership separate or shared.
If you or your spouse are renting an apartment or home, you can indicate how the lease agreement should be changed in the event of a divorce.
A. Yes, you may. You can stipulate one of the following:
- One person pay all the expenses
- Both people will share the expenses equally
- Each person will pay for expenses
You can decide what counts as regular household expenses, and what does not.
Items commonly considered to be regular household expenses:
Items commonly NOT considered to be regular household expenses:
- Cellular phone
- Gasoline for car or truck
- Entertainment (movies, baseball games, etc.)
A. You can stipulate in the prenup who will get custody over the pet if you owned one before marriage.