A prenuptial agreement, often referred to as a prenup, is a legally binding contract executed between two individuals before they marry. It outlines how assets and debts will be divided in the event of a divorce or death. For example, a prenup might specify that a business owned by one party prior to the marriage will remain their sole property, even if the marriage ends. The agreement also details how spousal support, if any, will be handled.
Prenuptial agreements provide clarity and predictability in potentially contentious situations. They can protect pre-marital assets, safeguard future inheritances, and simplify the divorce process. Historically, prenups were more common among wealthy individuals. However, they are increasingly relevant for anyone entering a marriage with significant assets, debts, or specific financial goals. This proactive approach to financial planning can minimize disputes and ensure a smoother resolution should the marriage dissolve.
