The prenuptial agreement (often abbreviated to “prenup”) is hardly a new form of legal document. In fact it has been around in one form or another for thousands of years. The practice of writing a prenuptial agreement before entering into a marriage contract was most prevalently used in European and Far Eastern cultures where royal families always made provisions for protecting their wealth.

The very thought of a prenup is certainly not romantic and causes butterflies in many people’s stomachs but bear in mind that it is only a contract. The “pre” in prenup means it is a binding agreement that occurs between prospective spouses before the marriage or “nuptial” takes place. Once it is signed and out of the way, both parties can relax and move on to more enjoyment aspects of wedding planning.

What Does it Do?

A prenuptial agreement gives both parties the opportunity to set forth what will happen to income and other assets (including property) if the marriage should end in separation, divorce or death. Discussing financial issues is never easy but talking about money before entering into a marriage can save heartache and stress in the long term. Without a prenup, assets could end up in the hands of your spouse’s children from a previous marriage as opposed to your own children. Or they could go to a lazy mate who contributed very little while you built a business from the ground up or wrote a book or manual that later became a smashing success. Don’t let the rewards of your hard labor end up in the wrong hands! A prenup is geared towards avoiding these unnecessary problems.

The financial well being of a marriage can be ensured ahead of time when a prenup is drawn up and approved by both partners. It is definitely worth taking into consideration for couples planning to take the big step into matrimony. After all, marriage is as much a financial union as it is a physical and emotional union.

How Do You Know if a Prenup is Right For You?

If you fall into any one of the below categories, you should take the time to consider a prenup:

You have assets such as a home, stock or retirement funds

You own a business or are part owner in one

You have children and/or grandchildren from a previous marriage

One of you is more financially stable (or wealthier) than the other

You may be receiving money from an inheritance

One of you will be supporting the other one while he/she pursues a facet of higher education

You have loved ones who need to be taken care of (i.e., elderly parents or a mentally or physically challenged child or sibling)

You have or are pursuing a degree in a potentially profitable profession, such as law or medicine

You see a potentially large income increase due to your business taking off, your book making it onto the bestseller list, your band recording their first hit, etc.

Five Conditions for Prenuptial Agreements

While the enforcement of prenuptial agreements varies from state to state, there are five conditions that are generally imposed. First, all assets, accounts, liabilities, sources of income and any other factors likely to create a shift in financial position must, or at the very least should, be revealed. Second, each party must be represented by independent counsel. Third, generally the agreement must be fair at the time it is entered into. What this means is that your prospective spouse must have a certain period of time between when he or she is presented with the agreement and when you both will be getting married. It could also mean that if your spouse is from a foreign country, the document must be translated into their native language or a translator must be brought in to read it to them in their native tongue. In some states, the prenup must also be fair at the time of enforcement. Unfortunately, the courts and a jury often decide what a reasonable person would consider fair. Fourth, the courts may cancel the prenup if enforcing it would impoverish either party and create a risk of seeking public assistance. Finally, the fifth condition is that you cannot ever disclaim child support.

A Few More Things to Keep in Mind About Prenups …

Your spouse’s will can never be less generous than the conditions of the prenuptial agreement. However, a will can always leave more than the amount agreed upon in the prenup.

You can include a sunset clause in your prenuptial, which means the agreement will only be valid for a predetermined amount of time. You can decide the prenup will expire in ten years, twenty, or at any other time you select. This option allows people the comfort of a prenuptial while not feeling bound by it after the marriage has proven to last.

While it may seem obvious, make sure the agreement is in writing. Also have witnesses present when it is signed. The contract should be signed in triplicate. One copy should go to the groom, another to the bride, and a third should be kept with a third party or in a safety deposit box.