How to Prepare a Prenuptial Agreement

No longer just for celebrities and the ultrarich, a prenuptial is becoming a typical part of planning a wedding. It is a legally binding agreement that describes how assets will be divided between the partners, should divorce or death occur. Consider it a checks-and-balances document that ensures financial well-being for the matrimonial set.

Instructions

Difficulty: Moderate

1. Determine whether you need a prenup. Some instances where one may be advisable include the following:
2. Open a discussion about the prenuptial agreement well in advance of the marriage date. Choose a time and a place to talk where both of you are comfortable. Be open, candid and direct. Listen to your spouse-to-be and invite ideas. Treat it as a collaborative process. Frame the whole concept of a prenup so that both parties feel they gain something from the agreement.
3. Find a good divorce or contracts lawyer to help craft a bulletproof prenuptial agreement. Be prepared to pay anywhere from a few hundred dollars to several thousand dollars for a detailed agreement involving many assets. The entire process should only take two or three weeks.
4. Detail all assets and liabilities and, if possible, any future inheritances.
5. Determine who pays any debts accumulated during the marriage.
6. Specify who gets the house(s) and how you will divide any bank accounts, insurance sums and investment income (including retirement assets)--in other words, who gets what in the event of death or divorce.
7. Note any gifts, assets and belongings that each party is bringing into the marriage.
8. Include an agreement on future alimony and spousal support before you exchange marriage vows.
9. Mention potential death benefits from life insurance, as well as how--and to whom--they will be distributed.

Tips & Warnings

• Make sure to draft a prenuptial agreement that is valid in all 50 states. A lawyer can help you with this. See 323 Plan a Wedding.
• Be careful how you craft your prenuptial agreement. The judge may void documents that are written in a way that can lead to divorce (for example, an agreement that gives a party motivation to leave the marriage for financial considerations).
• Be wary of do-it-yourself online prenups. While some companies may be valid, others are fly-by-night firms that will do an inadequate job of writing up your agreement.