What is a Prenuptial Agreement (Prenup) and How Does It Work?
By Sofie Wise
Couples who get married typically do so with the hope and intention that their union will last a lifetime. Nevertheless, some marriages will inevitably end in divorce, with data showing there were 2.5 divorces per 1,000 people in the United States in 2021.
The process of going through a divorce is often time-consuming, stressful and expensive. However, there’s one tool that may greatly simplify the process: a prenuptial agreement.
Many people have heard of prenuptial agreements but may not fully understand what they are or how they might benefit from one. Use our guide below to learn about prenuptial agreements in more detail, including what they are, the benefits and cost of creating one and when you might want to consider having an attorney assist with the process.
What is a prenup?
A prenuptial agreement, also known as a prenup, is a type of legal contract some couples sign before they marry. The purpose of a prenup is to define each party’s rights and responsibilities should they ever divorce.
How prenups work and what they cover
A prenup is a legally binding document. Thus, a valid prenup allows a couple to determine in advance how they want to handle certain topics that must be addressed if they ever choose to terminate their marriage.
Prenuptial agreements commonly cover topics such as:
Division of the couple’s property, assets and debts
Amounts and durations of alimony or spousal support that one party will pay to the other
Division of business ownership and interests
Protection or distribution of inheritance rights
Benefits of a prenup
There are many benefits of entering into a prenuptial agreement. For example, a prenup may:
Provide the parties with asset and debt protection
Help preserve family wealth and inheritances belonging to one spouse
Facilitate and encourage open and transparent discussions between the parties regarding their finances
Set expectations about the division and distribution of property
Help avoid the possibility of disputes during the divorce process
Reduce the amount of time and expense necessary to finalize the divorce
Who can benefit from a prenuptial agreement?
A common misconception is that prenups are used primarily by the rich and famous. However, this isn’t always the case.
In fact, many couples may benefit from a prenuptial agreement, no matter their financial status. A prenup may often reduce or prevent disputes in a divorce, so it’s always worth considering before you get married.
Read the full article on Marble.
Originally published October 3, 3023.