A prenuptial agreement — sometimes referred to as a “prenup” or a “premarital agreement” — is an agreement signed by a couple prior to marriage. The agreement determines how the couple's assets will be divided if they divorce and may set the amount of alimony paid by the high-net-worth partner. It may also impact the division of an individual's property upon death.
Prenuptial agreements are advisable under a variety of circumstances. As a general rule of thumb, the wealthier you are, the more important it is to have a prenuptial agreement. The division of assets can be overridden by a prenuptial agreement, which is why this legal instrument is popular with high-net-worth individuals.