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.

RELATED TERMS
  1. Postnuptial Agreement

    A contract created by spouses after entering into marriage that ...
  2. Uniform Premarital Agreement Act

    A regulation that allows the parties of a premarital contract ...
  3. Trading Partner Agreement

    An agreement drawn up by two parties that have agreed to trade ...
  4. Credit Agreement

    A legal contract in which a bank arranges to loan a customer ...
  5. Equitable Division

    A legal theory that guides how property acquired during the course ...
  6. Heads Of Agreement

    A non-binding document outlining the main issues relevant to ...
Related Articles
  1. Financial Advisors

    How to Bring Up a Prenup with Clients

    Prenups aren't just for the rich. Here's how to help clients agree to one if you think they'll benefit.
  2. Financial Advisors

    Top Benefits of Prenup and Postnup Agreements

    It can be a sticky subject, but prenuptial or postnuptial agreements can head off a lot of potential messiness. Here's a quick guide.
  3. Personal Finance

    Before You Remarry: Blending 2 Families' Finances

    Whether both of you are bringing kids into the new marriage, or just one of you, here are some smart solutions to preempt any financial tensions.
  4. Personal Finance

    Postnup vs. Prenup: Marriage Roulette Protection

    ...and how to determine which, if either, your marriage needs.
  5. Retirement

    5 Things To Consider Before Late-In-Life Marriage

    Waiting to marry has become the norm, but do you know what to consider before saying "I do"?
  6. Retirement

    Create A Pain-Free Postnuptial Agreement

    This marital contract can underline your love for each other - not undermine it.
  7. Your Clients

    Older Clients Marrying: How Advisors Can Help

    There are financial issues for clients marrying at any stage of life, but older spouses may bring many more things they need to talk through to the table.
  8. Budgeting

    You Can't Live On Love

    If your head is in the clouds, check out this down-to-earth financial advice for couples.
  9. Personal Finance

    5 Signs You Need A Postnup

    They're not the most fun thing to contemplate, but these contracts can actually help a marriage.
  10. Personal Finance

    Why You Need a Prenup Before Remarrying

    Anytime a couple is bringing significant assets or debts into a new marriage, a prenuptial agreement protects you, your spouse-to-be and your kids.
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 Answer >>
  2. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
  3. What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Answer >>
  4. How can I protect my business from my spouse during a high net worth divorce?

    Understand what constitutes a high-net-worth divorce, and learn how business owners can protect their companies when going ... Read Answer >>
  5. Under what circumstances would someone enter into a repurchase agreement?

    Learn when investors want to enter into a repurchase agreement, such as to gain quick access to liquidity and enjoy flexibility ... Read Answer >>
  6. Which terms should be included in a partnership agreement?

    Understand what specific terms should be included in a business partnership agreement and how each affects the partners in ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center