Waddell & Reed

Prenuptial Agreements

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Even if you never thought about signing a prenuptial agreement the first time you married, it's wise to consider it now, because marriage is often more complicated the second (or third or fourth) time around. You may have more assets now, or you may own a business or have children to protect. And because you've been through it before, you may be worried about the financial consequences of divorce or widowhood.

A prenuptial agreement can ease your mind by spelling out what assets and liabilities each partner is bringing into the marriage, and by determining how money or property brought into the marriage or acquired during the marriage will be divided if the marriage ends either in death or divorce.

A prenuptial agreement addresses some or all of these points:

  • Assets and liabilities: What assets are you each bringing into the marriage? How much are they worth, and who owns them? Which ones will become marital property, and which ones will continue to be owned individually? Will gifts and inheritances be shared or separate? What liabilities do you have (e.g., back taxes or other debt)?
  • Divorce: If you divorce, how will you divide assets brought into the marriage or acquired during the marriage? Will either spouse receive a lump-sum cash settlement or alimony?
  • Estate planning: What will go to your children from previous marriages? What will go to children you have together?
  • Special contributions of partners: If one spouse contributes to the marriage in a special way (e.g., limiting his or her career for the benefit of children or the other spouse), will that spouse be provided for? What if one spouse brings more liabilities to the marriage than the other?

Because it's difficult to write an ironclad prenuptial agreement, don't try doing it yourself. Instead, you and your future spouse should hire separate attorneys to help you negotiate an agreement that will protect your financial interests without causing mistrust between the two of you.

This information is for educational purposes only and is not intended as tax or investment advice.

This information is prepared by an independent third party, Broadridge Investor Communication Solutions, Inc. and is provided for informational and educational purposes only. Waddell & Reed believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided. This information is not meant to be a complete summary or statement of all available data necessary for making financial or investment decisions and does not constitute a recommendation.

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