Q & A
What is a Prenuptial Agreement?
A prenuptial agreement is a legal agreement between two fiancées who are engaged to be married. This agreement outlines certain property rights and financial arrangements that the parties agree to as a condition of getting married. The agreement allows the parties to avoid default rules about property in case of divorce or death.
Why Would I Need a Prenuptial Agreement?
Prenuptial agreements can help protect your assets in case of divorce or death. You can designate that certain property will be considered your own separate property and not subject to any claims by your spouse. They can protect family businesses and your children’s interests in your efforts and assets. They also provide clarity and a plan about how to distribute property if the spouses get divorced so contention is limited. A prenuptial agreement provides certainty in uncertain situations.
If you do not have a prenuptial agreement and you get divorced, state laws determine how your property will be divided. In community property states, this means that the property you earned or acquired during the marriage may be subject to a 50/50 split. In the remainder of states, this means that the marital property would be subject to “equitable division,” which is a fair distribution of the property between the parties, but not necessarily an equal split. Even though most states do not divide separate property during a divorce, many states allow the court to consider the existence and value of separate property when dividing marital property. This may translate to a spouse having more assets receiving a lower value of the distribution of the marital estate
What Are the Requirements for a Valid Prenuptial Agreement?
Like most state laws, requirements for prenuptial agreements are based on state law. Your prenuptial agreement must comply with the laws of your state. Some common trends among many states regarding prenuptial agreements include:
- Disclosures – The parties may have to provide complete and accurate disclosures about their respective income, assets and debts.
- Written – Generally, a prenuptial agreement should be in writing and signed by both parties. It should be clear to understand.
- Fair – Courts may not enforce an agreement that is obviously one-sided and unfair. Courts may consider whether the circumstances surrounding the prenuptial agreement were unfair, such as asking a bride to sign it or else immediately before the wedding. Additionally, courts may consider whether the substantive information included in the prenuptial agreement for fairness.
- Legal representation – Each fiancée should be represented by independent, legal counsel to ensure that his or her rights are properly protected. However, the court may still be able to enforce the prenuptial agreement even if the spouses were not represented by independent legal counsel if a spouse signed a waiver to this effect or had the opportunity to consult with a lawyer and simply chose not to.
What Can a Prenuptial Agreement Do?
A prenuptial agreement can protect a person’s property interests. Prenuptial agreements can protect a spouse from assuming the debts of the other and determine which property is passed onto other beneficiaries after death. They can also clarify the financial rights and responsibilities during a marriage. They may also help to avoid long and expensive disputes in case the couple decides to get divorced.