A prenuptial agreement is a contract that specifies what rights each person in a marriage has to the other's assets either during the marriage or in the event of a divorce. In addition to divorce, prenuptial agreements may address termination of the marriage as a result of death.
A prenuptial agreement is signed by both parties before the marriage, but the same type of agreement can be signed after the marriage. This would be called a postnuptial agreement.
Most commonly, a prenuptial agreement is used to tell how property owned before the marriage will be treated should the marriage end in divorce. It will outline how assets and debts that develop during the marriage will be treated. It will also describe the financial support due to each spouse (although it cannot define child support payments because these will be set by a judge).
For second and subsequent marriages, a prenuptial agreement can help ensure that certain assets remain the property of children from a prior marriage instead of stepparents.
Prenuptial agreements can help you protect your assets and income. They can be difficult to set up, however, because they are supposed to clarify what will happen with disputes that have not yet occurred and are based upon factors that do not yet exist (such as changes in income and assets and the birth of children).
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