Prenup Encyclopedia

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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.

*Disclaimer: Please note that these terms and phrases are within the context of a prenuptial agreement. “You,” in this context, is a partner entering a marriage. These terms and phrases are not to be taken for literal terms or for any other use, and do not constitute legal advice.
Terms & phrases to know

Acquire

To buy or have, usually related to obtaining property, assets, debt, etc.

Adultery

Consensual sex between a spouse and another person whom is not their spouse. (Don’t cheat on your spouse, it never turns out well!)

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.

Assets

Property (real or personal) that is of value, and that you may be getting a prenuptial agreement to protect. Examples include accounts, houses, cars, investments, etc.

Attorney

A person who is a member of the legal profession who is admitted to practice law in a jurisdiction in the United States.

Benefactor

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.

Beneficiary

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.

Billable hours

Hours that will be billed to you by your lawyer or attorney based on the complexity of your prenup.

Bonuses included in the financial schedule of your prenup

Additional payment on top of salary. Can be performance based or company based. Make sure to include bonuses in your financial schedule.
Payments made by a parent to the other parent in order to provide for their child. Child support statutes or guidelines differ per state and individual state laws define child support more specifically. Child support cannot be contracted in a prenuptial agreement.

Clause in a prenup

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

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. 

Contributions from either Fiancé

Something that is put up or given in participation of something else. Example – contributions to a bank account are the amount of money being placed in that account by a partner or contributions to a business are efforts put forth to further the success or running of that business.

Child Custody

Responsibility of a child, that is often defined in terms of Legal Custody and Physical Custody. Specific terms vary by state. Child custody cannot be contracted in a prenuptial agreement.

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.

Divorce

The legal ending of a marriage. Divorce can refer to both the legal process associated with ending a marriage, but also with the final result.

Draft prenuptial agreement

An unsigned, “unofficial” version of your prenuptial agreement, that may be a work in process.

Earned income

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

Enforceability of a prenuptial agreement

The likelihood that your prenuptial agreement will be upheld by a court of law if contested in the future during a separation, divorce, or death

Engaged

Congratulations! You’re about to get married!

Equality

Both partners are represented in a balanced and fair way without one holding more benefit than the other.

Equitable distribution

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. 

Essential inputs

Including crucial information within your prenup that is required by HelloPrenup.

Fiancé(e)

An engaged person – a person who is promised to a marriage. Also known as “off the market.”
You must include *all* of your financial information in your financial schedule. HelloPrenup offers categories to help you organize this information.

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.

Funds

A sum of money. Funds can refer to your money, their money, joint money.

Gen Zer

A person born between the years 1995 and 2009 who doesn’t believe in skinny jeans or side parts.

Gift(s)

Something that is given to you that you did not purchase on your own. Fun fact! An engagement ring is not a gift unless it was given on your birthday or on a holiday. Otherwise, it is a “conditional gift” and the condition of marriage must be fulfilled before it becomes marital property. IF the ring was given on your birthday or Christmas, then it is your separate property (usually).

Gratuitous transfers

A transfer of gifts or assets without anything in return.

Hire counsel

Getting legal advice and guidance from attorneys that specialize in prenuptial agreements and family planning.

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.  

Intellectual property – to be included in your prenup financial schedule

 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

A asset that has potential to generate income or appreciation in value over time (or at another time other than the present). All of your investments should be included in your Schedule A or B financial schedule.
Property that is co-owned between you and your partner.
Property that would be considered part of the marital estate and subject to division at the time of divorce.

Law of Competent Jurisdiction

This refers to which state’s law will be applied (likely to your divorce or separation matter) once the proper jurisdiction (state) is determined.
Clauses that you can include in your prenup, that often relate to behavior based requirements. These can include: Infidelity clause, sunset clause, confidentiality clause, social image clause, etc.

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.

Marriage License

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.

Marriage Certificate

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!

A person born between the years 1981 and 1996, who loves avocado toast and holds much disdain for dryer sheets.

Negotiations

Strategically discussing a topic until both parties find an acceptable solution or answer. The good news? Negotiations with your spouse regarding your prenuptial agreement have never been easier! HelloPrenup’s dispute resolution phase allows you and your fiancé to clearly see a list of the discrepancies in your answers- and easily decide which answer you will finally choose before finalizing your agreement.
Property that is not considered part of the marital estate and that is not or should not be subject to division in the event of a divorce.

Party (no, not that kind of party)

A person whose interests are represented in the prenup. You are a party and your partner is a party.

Petnup clause

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.

Physical custody is a parent’s right to have their child reside with them, and physical custody may be granted solely to one parent, or split between both parents. Physical custody cannot be contracted to in a prenuptial agreement.
An agreement signed post marriage that designates the terms of property and spousal support in the event of death, separation, or divorce. Not all states uphold postnuptial agreements, and it is widely understood that a prenuptial agreement generally has a greater chance of enforcement than a postnuptial agreement.
Things you own before getting married.
Property that is yours before you get married, or property that is considered separate property by that owner within the marriage.

Prenup

So, what is a prenup anyway? You probably came to this website to find out. Good news, you’re in the right place! A prenuptial agreement, also commonly referred to as a premarital agreement, is a legal contract made between two people who plan to marry. A prenup agreement outlines certain property rights and financial agreements that the engaged couple agree to as a condition of getting married. A prenuptial agreement allows the parties to contract around state divorce laws with respect to what is considered marital property, or separate property in the case of divorce or death.

Prenuptial Agreement

What is a prenuptial agreement, you ask? Good news, you are in the right place!

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.

Premarital Agreement

A prenup is also known as a premarital agreement, and is just a short form of the term “prenuptial agreement.” A prenup outlines how certain property rights will be held as a condition of the marriage. Many couples choose to obtain a prenup prior to marriage in an effort to decide for themselves what is considered joint marital property or separate property in the event of a divorce or death of either party.

Prenup Lawyer

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. 

Provisions

A clause providing for a particular matter within the agreement. Example – sunset clause.

Restricted stock included in a Schedule A or B in a Prenuptial Agreement

Restricted stock is an asset that can be included in your Schedule A or B financial schedule in your prenuptial agreement. This form of asset is a type of executive compensation where shares are issued to employees that come with conditions and a vesting period.

Revisions and changes to your prenup

Revising or making changes to your prenup. Many states allow partners to revise their prenup even after they are married, if such revisions are made following the same formalities as the prenuptial agreement, and those changes are signed and signatures are notarized.
If you are getting married for the second time, there are some important points to note with respect to prenups and second marriages. A prenuptial agreement can help you and your spouse-to-be decide how you will handle finances, what assets will be considered separate property or marital property, and what will happen if your marriage ever ends in divorce or death. Statistically (and we know you aren’t going to be this statistic, don’t worry!) second marriages face a greater risk of divorce, with 67% ending in divorce. If you are remarrying, chances are you have acquired more assets than if this were a first marriage, so a prenup may be more relevant to you now than before.

Separate Debt

Owing money. How will your pre-marital or debt acquired after marriage be held? A prenuptial agreement can specify what debt remains separate debt and what debt should be considered marital debt.

Separate funds

You and your partner don’t share that money together. Your money is yours, and your partner’s is theirs. Funds that are not intended to be part of the marital estate, and for that reason are kept separate.

Separate property

Property that is to remain yours, and yours alone, and not be considered part of the marital estate. Gifts can also be separate property (even if you didn’t use your own money to purchase it), so long as you specify that they should be considered Separate Property in the prenuptial agreement. In some states, Separate Property is also called “Nonmarital Property.”
A payment from one spouse to the other spouse upon divorce or separation. The original term “alimony” arose from the olden days, when a man would need to pay his ex-wife a certain amount of money to maintain her lifestyle upon divorce (because women seldom were allowed to work- thank god times have changed!) Alimony, or in some states as they are now called, spousal support, or spousal maintenance statutes differ per state. Each state statute can define spousal support calculations pursuant to that state’s statute. Make sure to check your state statute for specifics!

Types of “Property”

Under the law (when you get divorced) property is either considered “marital property” or “community property” / “separate property” or “nonmarital property” and the terminology that is used depends on what state you live in.

Unearned income

Money that comes in from somewhere other than your employment. Example – interest in savings accounts, bonds, alimony, dividends.
A multi-state act that helps give states guidelines on how prenuptial agreements should be drafted, what they should include, and how a prenup should be enforced. Not all states have adopted the UPAA, and some has adopted it in part with modifications.

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