With Tom Cruise and Katie Holmes’ 11-day divorce settlement making headlines (thanks to, you guessed it, an air-tight prenuptial agreement) we got to thinking: what is a prenup, anyway? And does every gal need one? Here are the facts you need to know now.

1. What it is: A prenuptial agreement (also known as premarital agreement) is a legally binding contract entered into marriage and/or a civil union by the people intending to marry. The content varies from contract to contract, but most commonly includes provisions for the division of property and assets as well as child-support in the event of a divorce or death. In the US, “prenups” are recognized in all 50 states.

2. Who needs one: Newsflash: prenups are not just for the super rich. Sure, they are most common when one or both parties bring mega assets to the table, but it is becoming more common for couples of more modest means to utilize them as well. Prenups are also an option for a domestic partnership or same sex marriage, although specific provisions can differ depending on if the state observes same sex marriages.

3. How to get one: In most states, five elements are required for a valid prenup: the agreement must be in writing (oral agreements don’t count!); the contract must be entered into voluntarily; the contract must have full and/or fair disclosure at the time of execution; the agreement cannot be excessively unreasonable; and the contract must be executed by both parties (not their attorneys), typically in the presence of a notary public. The cost from drafting to signing the agreement is typically around $2,000 to $5,000.

4. What it can do: Along with the usual provisions for division of property and child support, prenups can come in handy for other common marital disputes. For example, the transfer of property to children from previous marriages. Without a prenup, the surviving spouse might have the right to claim a large part of the other spouse’s property after their death. With a prenup, the spouse can make sure that their children get their fair share. Saddled with student loans? Prenups can also be used to protect spouses from each other’s debts in the event of death or divorce.

5. What if you opt out: According to a study in USA Today, only about 3% of couples currently have a prenuptial agreement — although almost one-third of single adults say they would ask a significant other to sign a prenup. So if you opt not to ink one, you’re certainly not alone. In the absence of a prenup, your state’s laws determine who owns the property, debt, and other assets that you acquire during your marriage, as well as what happens to those assets at divorce or death. The court will also decide any alimony or guardianship issues, if necessary.

Regardless of your choice, you and your spouse-to-be should read up on your rights as a married couple (and as individuals should wedded bliss not pan out) before you tie the knot!