He Said, She Said; A Guide to Prenuptial Agreements

Understand this important financial and legal agreement before you sign on the dotted line

By Glyn Sheridan

Photo by iStockphoto.com

A prenuptial agreement ("prenup") or premarital agreement is a contract entered into freely by both prospective spouses to define important financial elements and other aspects of their lives after the wedding. Once rare, prenuptial agreements are becoming more common.

Features

The prenuptial agreement may detail the amount of assets each party brings into the marriage and offer protection against the future earning potential for either spouse. A prenuptial agreement might include the division of assets upon death or if the couple divorces.

Benefits

The spouse with the most assets may realize the largest financial benefit from a prenuptial agreement. However, it may also protect the other spouse if he later receives an inheritance or if one spouse owns a home or other assets that she wishes to pass to a different family member. Child custody may also be an issue.

Timing

Both parties should sign the prenuptial agreement well before the wedding to avoid the appearance of last-minute coercion.

Agreement

Both parties must agree to all of the terms of the prenuptial agreement. In addition, the agreement must be in writing. For extra protection, the parties may request witnesses to the signing, or they may videotape the reading and the signing of the agreement.

Legal Standing

The married couple may draw up a postnuptial agreement to void the prenuptial agreement, or one spouse may contest all or a portion of the agreement upon divorce or upon the death of the other spouse. A judge will make a final determination if either spouse contests the prenuptial agreement.