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What is this for?
This Prenup Encyclopedia is designed to gear you and your partner up before you dive into your prenuptial agreement.
Advice – the legal kind
Obtaining legal information regarding your prenuptial agreement from an attorney. HelloPrenup is not a law firm, and cannot provide you with legal advice or representation. If you are looking for legal advice or advice on your specific situation, you should contact a licensed attorney.
Alimony, also known as spousal support, is a legal obligation for one spouse to provide financial support to the other spouse after a divorce or legal separation. It is intended to help the receiving spouse maintain the same standard of living that they had during the marriage.
The purpose of alimony is to provide financial assistance to the dependent spouse, ensuring that they have sufficient resources to meet their basic needs and maintain their standard of living after the divorce. Alimony can be either temporary, which is paid during the process of the divorce, or permanent, which is paid until a specific event occurs, such as the remarriage of the receiving spouse, social security retirement age, or the death of either party.
The amount and duration of alimony is determined by state law or guidelines, considering several factors such as the length of the marriage, the earning capacity of each party, the contributions of each party to the marriage, and the needs of each party. The court will also consider the financial needs of each party, including the ability to support themselves after the divorce, and whether one party is at a disadvantage due to the divorce.
The same thing as a prenup! This term is legalease, but the concept is the same.
An antenuptial contract, also known as a prenuptial agreement or premarital agreement, is a legal contract entered into by a couple before they are married. The purpose of an antenuptial contract is to establish the rights and obligations of each party in the event of a divorce or death. It is a legally binding agreement that can be used to define the financial rights and responsibilities of each spouse during the marriage and in the event of divorce or death.
In the context of a trust or estate planning document, a benefactor is the person or entity who establishes and funds the trust. The benefactor is also known as the grantor, settlor, or trustor. The benefactor creates the trust by transferring assets, such as cash, real estate, or securities, into the trust, and by appointing a trustee to manage the trust assets on behalf of the beneficiaries.
The benefactor can also be a beneficiary of the trust, receiving benefits from the trust during their lifetime or after their death, or they can be a third party who sets up the trust for the benefit of others.
In the context of a trust or estate planning, a beneficiary is a person or entity that is entitled to receive benefits from the trust. A trust is created by a benefactor (also known as grantor, settlor, or trustor) who transfers assets, such as cash, real estate, or securities, into the trust and appoints a trustee to manage the trust assets on behalf of the beneficiaries.
The beneficiaries of a trust are determined by the terms of the trust document and can include individuals, organizations, or even future generations. A trust can have one or more beneficiaries and they can be either primary or secondary beneficiaries.
Beneficiaries may receive benefits from the trust in the form of income from the trust assets, the use of trust property, or a distribution of trust principal. The terms of the trust determine the timing, amount and conditions of the distributions to the beneficiaries.
Clauses or provisions in a prenup are the specific sections of the agreement that set out the rights, obligations, and responsibilities of the parties involved in the event of a divorce or death. Prenuptial agreements are legal contracts that are entered into by a couple before they are married, and they are intended to establish the financial rights and responsibilities of each spouse during the marriage and in the event of divorce.
Clauses or provisions in a prenup can include:
- Property division: including how assets and debts acquired during the marriage will be divided in case of divorce.
- Alimony or spousal support: specifying the amount and duration of alimony payments in the event of divorce.
- Waiver of alimony or spousal support: both parties can agree to waive the right to alimony.
- Distribution of assets in case of death: specifying how assets will be distributed in case of death of one of the parties.
- Business: specifying how a business will be handled in the event of divorce.
- Retirement accounts and pensions: specifying how retirement accounts and pensions will be divided in case of divorce.
- Life insurance: specifying whether life insurance policies must be maintained during the marriage or in the event of a divorce.
You can read more about HelloPrenup clauses here.
Community property refers to a specific type of property ownership system where any assets acquired during the marriage are considered jointly owned by both partners, regardless of whose income or efforts were used to acquire them. This means that in the event of a divorce without a prenup, all assets and debts acquired during the marriage are divided equally between the partners.
This system is mainly used in certain states in the US like Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Community Property can include assets such as income, real estate, bank accounts, and investments that are acquired or increased in value during the marriage if you do not choose to keep them separate.
Related read: How to protect assets with a prenup .
Contributions from either Fiancé
Dissolution of marriage
Dissolution of marriage, also known as divorce, is the legal process by which a marriage is ended. The process of dissolution of marriage usually begins when one party files a petition for divorce. It’s worth noting that the laws and procedures for dissolution of marriage can vary from state to state.
Draft prenuptial agreement
You’ll list out your earned income on your financial schedule. Earned income is income that is received as a result of an individual’s employment or self-employment. It typically includes wages, salaries, bonuses, and tips, as well as business or farm income for self-employed individuals. Earned income can also include certain types of disability income, and certain types of annuities, and is generally subject to income tax. Read more here: IRS Definition of earned income
Equitable distribution is the method of property division in divorce used in a majority of states in the United States. There are a total of 41 states and the District of Columbia that utilize equitable distribution. This means that in the event of a divorce without a prenup, assets and debts acquired either before or during the marriage can be divided equitably between the partners, based on a series of factors that differs per state. Without a prenup, you may not have control over what that ‘equitable’ distribution looks like.
Marital Property can include assets such as income, real estate, bank accounts, and investments that are acquired before marriage, during marriage, or increased in value during the marriage.
Some states require “full disclosure” of finances, and others require “full and fair financial disclosure” of finances. Regardless, if you want the greatest chance of enforcement, it is important that you disclose all of your finances. So, where do you put this information? Each fiancé will have a “Schedule A” or “Schedule B” financial schedule, that will include this information.
Full financial disclosure is imperative for a variety of reasons. If you fail to disclose all of your assets, your prenup may be found invalid in the case of a divorce. This means you and your spouse may have to take part in litigation to resolve the matters that should have been resolved in your prenup.
Want an example of what may happen should you choose NOT to disclose all of your finances? In one Massachusetts case, the appeals court invalidated a prenuptial agreement after finding a lack of full disclosure by one of the spouses (Schechter v. Schechter, 88 Mass. App. Ct. 239 (2015). In this case, the husband did not disclose his financial assets. He also falsely claimed that his primary asset, his real estate company, was a partnership when it was not.
Infidelity refers to a breach of trust in a romantic relationship, by one partner engaging in a secret sexual or romantic relationship with another person. It is commonly referred to as “cheating” or “having an affair.” It is often considered a violation of the relationship’s expectations and may lead to the breakdown of the relationship. HelloPrenup offers an infidelity clause to help both partners feel comfortable with the financial consequences in the event of infidelity.
Inheritance from a will or trust refers to the process by which assets and property are transferred to beneficiaries after the death of the person who created the will or trust (the benefactor). The beneficiaries are typically designated by the person who created the will or trust, and the assets and property are transferred to them according to the terms outlined in the will or trust.
An invention or working project that stems from creativity – can be protected with a patent, copyright, or trademarkable rights. If you are the owner of intellectual property, you probably want to protect your interest in your prenup.
Here are some steps that can be taken to protect intellectual property in a prenuptial agreement:
- Clearly define that intellectual property should be “separate property.”
- Identify ownership of intellectual property in your financial schedule. In general, if the patent is an asset that has significant value and is likely to generate income in the future, it may be beneficial to list it in the financial schedule. This way, the parties can agree on how the income generated by the patent will be shared or divided in the event of a divorce or death.
- You may want to include a confidentiality clause. To protect trade secrets and other confidential information, the agreement should include a non-disclosure clause that prohibits either party from disclosing or using the other party’s confidential information without permission.
Investments – to be included in your prenup financial schedule
Law of Competent Jurisdiction
Lump sum payments
Lump sum payments are optional to add to your prenup, and may level the playing field for couples who have great wealth disparities. They are separate from alimony or spousal support, which is dictated by and calculated according to state statute. Some couples consider including lump sum payment terms in their prenuptial agreement in the instance where one party plans to give up their job to care for children, and may have a reduced earning capacity as a result.
Marital property is considered property that is a part of the marital estate and subject to division in the event of a divorce.
Marital property refers to a specific type of property ownership system in equitable distribution states, where both premarital assets and assets acquired during the marriage may be considered subject to division in the event of a divorce, depending on a series of factors dictated by the state. Some factors may include the length of the marriage, earning potential of the parties, whether there are children, contributions to the marriage, etc. If it sounds like equitable distribution states have a lot of authority to decide what is considered marital and what is considered separate — that’s because they do. This is why a prenup is so important, because it allows you to decide what should be separate property and what should be marital property. In the event of a divorce without a prenup in an equitable distribution state, all assets and debts acquired during the marriage, along with premarital assets may be divided “equitably” between the partners. It’s important to note that the specific laws and guidelines for equitable distribution can vary from state to state.
The states that use equitable distribution as the method of dividing property in a divorce include: Alabama, Arizona, Arkansas, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia.
A marriage license is a document typically issued by the country clerk that recognizes a couple’s legal ability to get married in the county and state in which it is filed.
Couples need to acquire a marriage license in advance of their marriage ceremony.
A marriage certificate is a document that shows you and your partner are legally married.
Psst make sure you sign your prenup before you sign your marriage certificate!
Party (no, not that kind of party)
We know it is unjust and appalling, but in most states furry children are still technically considered “property” under the law. A “Petnup clause,” as we like to call it, allows you to include the custody of your current or future pets in your prenup. Why include this? Because should you split in the future, it is unlikely that a Court will participate in enforcing or supervising a “shared” parenting arrangement for your fluff-child without one. YIKES!
In order to determine which of you is better suited to take ownership of the pets in a divorce, you need to keep in mind the time it takes to care for a furry child, including walks, play dates, and general availability. What do vet bills cost? What about haircuts? Does Fluffster have any serious medical issues? A Petnup clause can cover all of the above.
A prenup, or prenuptial agreement is a private legal contract made between two people who plan to get legally married. A prenup outlines how certain property rights and financial obligations will be delineated between the individuals, as a condition of getting married. A prenup allows couples to contract around state divorce laws and decide for themselves what is considered marital or non-marital property in the event of divorce or death.
We all love lawyers, right? (just kidding). Lawyers can be useful sometimes though, like when you have questions about how your legal rights will be impacted with respect to a prenuptial agreement. And, before you sign away those rights, it is incredibly important that you understand the implications of doing so. A “prenup lawyer” is typically a matrimonial lawyer, who practices in the field relating to all things family law.
Revisions and changes to your prenup
Separation / Legal Separation
Types of “Property”
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