Prenuptial Agreement

AAA

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.

INVESTOPEDIA EXPLAINS '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. Financial Infidelity

    Financial infidelity occurs when couples with combined finances ...
  2. Common Law Property

    A system used by most states to determine ownership of property ...
  3. High Net Worth Individual - HNWI

    A classification used by the financial services industry to denote ...
  4. Financial Asset

    An asset that derives value because of a contractual claim. Stocks, ...
  5. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
  6. Community Property

    A U.S. state-level legal distinction of a married individual's ...
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. 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 >>
  3. When is litigation better than mediation in a high net worth divorce case?

    Typically, litigation is better than mediation in high-net-worth divorce cases for two major situations – when there are ... Read Full Answer >>
  4. Why are high net worth divorces considered more challenging than other divorce cases?

    All divorces are emotionally difficult and create a financial strain on the parties involved. As it pertains to dividing ... Read Full Answer >>
  5. How do Social Security benefits for widows or widowers work?

    If you are the surviving widow or widower of a deceased worker who would have been eligible to receive Social Security benefits ... Read Full Answer >>
  6. How do Social Security survivor benefits work?

    Though it's not a pleasant subject, it is important to consider the financial future of your family in the event of your ... Read Full Answer >>
Related Articles
  1. Budgeting

    You Can't Live On Love

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

    Divorcing? The Right Way to Split Retirement Plans

    Mishandling how you define and allocate retirement-plan assets in a divorce can cost you plenty in taxes and aggravation. Here's how to do it right.
  3. Retirement

    Marriage, Divorce And The Dotted Line

    Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning?
  4. Insurance

    Services That Health Insurers Often Decline

    Learning how to navigate health insurance pitfalls will make you a more educated healthcare consumer.
  5. Budgeting

    Revealing The Hidden Costs Of Weddings

    Find out how to avoid paying more for your big day!
  6. Personal Finance

    Have A Princess Wedding On A Pauper Budget

    Don't say "I do" to years of debt. We'll show you how to have fairy tale wedding on a frugal budget.
  7. Retirement

    Create A Pain-Free Postnuptial Agreement

    This marital contract can underline your love for each other - not undermine it.
  8. 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"?
  9. Professionals

    Gay Marriage Ruling: Its Impact on Estate Planning

    Same-sex couples now face the same legal and financial issues as heterosexual couples; some may need to adopt simpler, more mainstream financial plans.
  10. 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.

You May Also Like

Hot Definitions
  1. Radner Equilibrium

    A theory suggesting that if economic decision makers have unlimited computational capacity for choice among strategies, then ...
  2. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  3. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  4. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  5. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  6. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!