Contents
What Is a Prenuptial Agreement?
Why Create a Prenup?
How to Discuss a Prenup with Your Partner
What a Prenup Cannot Do
How to Get Started Creating a Prenup
Why and How to Work with a Lawyer
How to Make Sure Your Prenup Is Valid
Enforcement and Nonenforcement of the Prenup
Postnuptial Agreements
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- What a prenup is and why it can be beneficial for you
- How to discuss a prenup productively and sensitively with your partner
- How to make sure your agreement is legal and fair to both sides
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What Is a Prenuptial Agreement?
A prenuptial agreement, or prenup for short, is a written, legal contract drafted and signed by a couple prior to marrying. The contract usually sets forth each spouse’s rights in the event of divorce or the death of one spouse, particularly their rights regarding financial support and division of property and assets.
There is no set form for a prenuptial agreement—agreements differ on a case-by-case basis. In addition, prenuptial agreements go by several different names, depending on which state you’re in. A prenuptial agreement may also be called a:
- Premarital agreement
- Premarital contract
- Antenuptial agreement
- Antenuptial contract
- Marriage settlement
- Marriage contract
Marriage
Marriage itself is a special type of contract that can dramatically alter the privileges and
duties of both spouses. The laws that determine those specific rights and privileges differ
by state—people who marry in a particular state are effectively agreeing to be bound
by that state’s rules. Prenuptial agreements allow you to opt out of the default rules of your state and agree to be bound by different rules of your own choosing, as long as your agreement is negotiated, crafted, and signed in compliance with your state’s prenuptial agreement statute.
State Laws
Prenuptial agreements usually focus on each spouse’s ownership rights during the marriage and how property would be divided and distributed in the event of divorce or the death of one spouse. For this reason, it’s helpful to understand how ownership of property by married people works under different types of state laws.
Broadly speaking, state laws take two different approaches to property ownership—common law rules and community property rules. Be aware, though, that each state has its own specific set of rules.
Common Law Rules
Most states follow what are known as common law rules. These rules dictate that:
- The money earned and property owned by each spouse during the marriage remains that spouse’s separate and distinct property.
- Each spouse has the exclusive right to manage, control, and dispose of the property he or she owns.
- Each spouse is individually responsible for the debts he or she incurs, and can’t be held responsible for the other spouse’s debts.
- If the spouses wish to own something jointly or in common, or incur debts for which they are both responsible, both names must appear on the title or loan document, or some other formal step must be taken to establish mutual ownership or responsibility.
If the couple divorces, however, most of the property acquired during the marriage will be considered marital property and subject to equitable division by a court, regardless of which spouse is the legal owner. When one spouse dies, common law grants the surviving spouse a legal right to claim a designated portion—generally one-third or one-half—of the deceased spouse’s estate, which the surviving spouse may elect to claim instead of taking whatever he or she would inherit under the terms of the will.
Community Property Rules
Nine states follow what are known as community property rules. These states are:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
Community property rules state that most property acquired by either spouse during a marriage—with the exception of inheritances and gifts—is considered community property. Community property is owned by both spouses, with each owning a 50% share and having the right to manage, control, and dispose of the property—regardless of whose name appears on the title. Debts incurred by either spouse during the marriage are likewise
community debts, for which both spouses are equally responsible. When one spouse dies, the surviving spouse continues to own half of the community property, whereas the
deceased spouse’s half passes to whomever is designated by the terms of his or her will.
Rules Differ by State
Though it’s useful to understand the difference between common law rules and community property rules, keep in mind that there are likely to be variations and exceptions to many of these general rules in any given state. Your prenuptial agreement should be drafted with the assistance of an attorney who understands the nuances of your state’s particular laws.
Prenuptial agreement statutes also differ from state to state in other important ways, including what can and can’t be done with the agreements, and the formalities that must be observed in signing them. For example, some states honor provisions in prenups that designate or limit the amount of spousal support (or alimony) a party will be entitled to receive in the event of a divorce, whereas other states expressly prohibit such provisions.
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