What You Need To Know About Prenuptial Agreements 

Having a prenuptial agreement – a prenup – in place can save both you and your spouse a lot of tax burden. Here are some of the main terms you should know before you write it.

• Separate Property.This is what belongs to each of you before the marriage. This includes bank accounts, retirement accounts, stocks, bonds, vehicles – it does not just refer to physical property.
• Marital Property.Anything earned or acquired over the course of the marriage. Any money either of you earn during the marriage is counted toward the marital property. Any purchases, including houses, also count here.
• Operative Event (or separation event).Whatever event that triggers the prenup – someone moving out, sending an intent to divorce, or filing for divorce. You want the exact date of this event, as well as any logistical details surrounding the course of action.
• Spousal Support (or maintenance).Historically referred to as alimony – often in play if one spouse gave up a career to care for a child. Spousal support is also notable if one spouse pursued vocational training or advanced education during the marriage, and the other spouse did not.
• Sunset Clause. This states when the prenup is no longer valid. It could be based on the length of the marriage, or it could just be a specific time. There needs to be an end date in place. This date is up to the spouses to negotiate.

And, a few pieces of advice:

• Have different lawyers.This will help each of you feel comfortable and protected. The added expense is worth the peace of mind.
• Talk about it.Don’t avoid the subject of the prenup because it is unromantic or difficult or even squirm-inducing. The more comfortable you both are discussing the terms, as well as the prenup’s reason for existing, the easier it will be to agree upon the details.
• Once it’s set, forget it.Once the prenup is in place, you do not need to keep thinking about it. Go on and focus on your happiness and the success of your relationship.

The stigmas surrounding prenuptial agreements have reduced significantly in recent years. Documents such as prenups are now more likely to be seen as they are intended: having the goal of protecting both parties and preventing future conflicts.