Although creating a prenuptial agreement might not be the first item that comes to mind for engaged couples, it is an important planning document. This is especially true where one or both partners have a high income or significant assets.
Prenuptial agreement overview
There are several requirements for a prenuptial agreement, also known as a prenup.
Both parties must agree to it voluntarily, without pressure or coercion, and they must fully disclose their assets and debts to the other party.
The prenup must be in writing and signed by the parties. It is created before the marriage and is effective upon marriage. The terms should not be one-sided, meaning that the agreement should be fair. Also, it cannot be signed under duress, fraud or undue influence.
High-asset couples
There may be additional considerations for couples with high assets. They may want to include specific information about how assets will be divided and how debts will be paid in the event of a divorce. Assets can include everything from personal property to real estate, investment portfolios and businesses. Debts may include the couple’s mortgage, credit cards and personal loans.
It should also include how separate property will be addressed, such as property one spouse had before the marriage or that was given to them as a gift or through an inheritance.
The couple may also want to include whether one spouse will pay the other spousal support and for how long, how non-retirement investment accounts will be divided, and how professional practices will be divided, if applicable.
If couples need help to write a prenuptial agreement or have other questions, there is assistance available.