Prenuptial Agreement

DEFINITION of 'Prenuptial Agreement'

A type of contract created by two people before entering into marriage. This contract could outline each party's responsibilities and property rights for the duration of the marriage. More commonly, prenuptial agreements outline terms and conditions associated with dividing up financial assets and responsibilities if the marriage dissolves.

BREAKING DOWN 'Prenuptial Agreement'

Prenuptial agreements have always been a very controversial topic for couples. Media portrayals of prenuptial agreements show them as devices that celebrities and other similar high net worth individuals use in order to cap the amount of wealth that an ex-spouse can claim.

However, when carefully planned and used correctly, a prenuptial agreement can be a fair way of disbursing assets and responsibilities.

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RELATED FAQS
  1. What effect will a prenuptial agreement have on a 401(k)?

    Courts have ruled that a prenuptial agreement for qualified plan (including 401(k)) assets is invalid. The logic is that ... Read Full Answer >>
  2. What are Social Security spousal benefits?

    Social Security spousal benefits are partial retirement or disability benefits granted to the spouses of qualifying taxpayers.  Qualifying ... Read Full Answer >>
  3. Are Social Security benefits affected by marriage?

    The amount of Social Security benefit you are eligible to collect upon retirement is not affected by marriage. Your benefit ... Read Full Answer >>
  4. How can I protect my business from my spouse during a high net worth divorce?

    For high net worth individuals (HNWIs), deciding to end a marriage through divorce brings special circumstances to consider. ... Read Full Answer >>
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    All divorces are emotionally difficult and create a financial strain on the parties involved. As it pertains to dividing ... Read Full Answer >>
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