Picture this: you’re on the brink of tying the knot with your partner, and in comes the fancy lingo – prenuptial agreement, antenuptial agreement, and premarital agreement. What do they all mean? You’ve probably heard of a prenup, well, they’re all different names for one. A prenup is a contract that lovebirds craft to make things super clear before they officially get married.
Now, if you’re up in the land of North Dakota, they use the name “Premarital Agreement.” In North Dakota, the “Chapter 14-03.2 Uniform Premarital and Marital Agreements Act” (a bit of a mouthful, we know) is the guidebook for crafting a prenup.
What’s really neat is that once you’ve exchanged those vows and officially become a duo, these agreements kick into action. So, whether you call it a prenup, an antenup, or a pre-love deal, just remember, it’s all about making sure your fairy tale keeps on sparkling!
Who might want a Premarital Agreement?
Premarital agreements are not strictly for wealthy individuals. They are for anyone looking to ensure their future is planned for the way they wish in case of divorce, and sometimes death.
Example: Previous Marriage with Children
John and Kate are planning on getting married. Kate was married in the past and has two children from her previous marriage. Her first husband passed away, leaving her an inheritance. She also has property that has been in her family for generations. She wants to ensure that these assets go to her children when she passes away. Kate and John decide to enter into a Premarital Agreement. This agreement can determine who controls Kate’s property and assets upon divorce, and she can add a clause referring to certain asset distributions in her death (it’s also important for her to execute a will to ensure assets are distributed according to her wishes).
Example: Business Owners
Susie and Steve own several successful restaurants. They are planning on getting married. Steve has been married previously and would like a Premarital Agreement in case of divorce or death, to plan for the division of property and assets and protect his children. The two meet with separate attorneys and come up with a Premarital Agreement that divides the rights in the restaurants that they both own fairly in the event of divorce. In the event of Steve’s death, he has made sure his business rights go through his estate and not automatically pass to Susie. Through a validly executed will, he has made sure the heirs to his estate are his children and not Susie.
The Uniform Premarital Agreement Act (UPAA) and The Uniform Premarital and Marital Agreement Act (UPMAA)
The Uniform Premarital Agreement Act (UPAA) promotes enforceability between states in regard to Premarital Agreements. It creates standards for prenup laws that states can use, such as putting a prenup in writing and making sure both spouses sign it. The Uniform Premarital and Marital Agreement Act (UPMAA) was created after the UPAA and intended to replace the UPAA and also be a little bit stricter on requirements for a valid and enforceable prenup. Twenty-eight states (including the District of Columbia) have enacted the UPAA or UPMAA. North Dakota is actually one of two UPMAA states, which means it has enacted laws similar to or exactly matching the UPMAA.
Who would benefit from signing a Premarital Agreement in North Dakota?
If you live in North Dakota, or any state for that matter, the main benefit of signing a premarital agreement is protecting yourself financially in the event of a divorce. Whether you have more, less, or equal assets to your partner, a prenup can help. In addition to protecting yourself financially, having a prenup in place can provide you with peace of mind for various reasons. One, that you’ll be protected financially, and two, that you won’t have to “argue” over assets since they will already be determined via prenup.
Here are some ways a premarital agreement can benefit you:
- Protecting yourself against your partner’s debt
- Protecting your children from another relationship (making sure your assets go to them and not a future ex-spouse)
- Protecting your family business
- Protecting your pets
- Protecting your time (a prenup can streamline a future divorce and make it much faster)
North Dakota Premarital Agreement Requirements
In North Dakota, a Premarital Agreement needs to follow certain rules in order to be considered valid and enforceable. For starters, it needs to be in writing and signed by both parties–easy right? (N.D. Cent. Code §14-03.2-05). That’s not all. In order to be enforceable, a North Dakota couple should also ensure that they both either had legal representation or had the opportunity to obtain legal representation. What does that mean? It means that each party had enough time to find a lawyer and get advice from that lawyer. (N.D. Cent Code §14.03.2-08).
What Makes a Premarital Agreement Unenforceable?
The basic requirements of a premarital agreement in North Dakota include putting it in writing, signatures, and having enough time to obtain a lawyer. If any of those things aren’t met, then a prenup could be thrown out. But is that all? Nope. There are other ways a prenup can be considered unenforceable and they are a bit more variable. For example, if a prenup in North Dakota was signed under duress, it won’t be enforced. Huh? What is duress?! Let’s discuss.
North Dakota courts can find a Premarital Agreement unenforceable if: (N.D. Cent Code §14.03.2-08):
- The agreement was not in writing
- The agreement was not signed by both parties
- The agreement was not signed voluntarily (this is the duress part– if the agreement was signed under duress, coercion)
- Either party did not have access to an attorney or reasonable time to obtain one
- The agreement was unconscionable at the time of signing
- The agreement will cause a hardship due to a material change in circumstances since the signing of the prenup
- The agreement “adversely affects a child’s right to support”
- The agreement restricts any type of victim remedies resulting from domestic violence
- The agreement penalizes a spouse for initiating a divorce
- The agreement violates public policy
- The agreement attempts to modify the grounds for a divorce
- The agreement modifies or waives spousal support and the person who would otherwise benefit from spousal support requires public assistance
What Can A Premarital Agreement in North Dakota Include?
Remember, each state has the ability to restrict the contents of a premarital agreement, that is, what you can put in your contract. A premarital agreement in North Dakota may include the following topics:
- Division of property if divorce or death occurs
- Ownership of debt
- What happens to property and debt in the event of death
- Alimony (i.e., spousal support)
- Attorney’s fees and costs
- Liability of debts
- Waiver of Inheritance Rights
- Any other matter that does not violate North Dakota law
What are Inheritance Rights?
In a premarital agreement, a “waiver of inheritance rights” means that one or both partners agree not to claim a share of specific assets or property from their spouse’s belongings if their spouse passes away. It’s a way for couples to decide on their own terms for how things should be divided after one of them is no longer with us, making sure everything goes according to their wishes. Keep in mind, that a valid and enforceable will is the best way to distribute assets upon death. A premarital agreement can be a great supplement to a will.
A waiver of inheritance rights can be especially helpful if you have kids from previous relationships, special items you want to protect, or specific ideas about how your property should be shared. In short, it’s about giving couples more say in how they want their things to be handled in the future in the event one of them dies while still married.
Important Cases Related to Enforceability of Prenuptial Agreements in North Dakota
The Binks: A Premarital Agreement Presented TWO Days Before the Wedding
In this case, Ruth and Theodore Binek got married and they both had children from previous marriages. Theodore’s net worth was around $600,000, while Ruth’s was $30,000. Two days before their wedding, Theodore presented Ruth with a premarital agreement, which said neither person could claim the other’s property in a divorce. Theo stated that he wouldn’t marry her unless she signed the agreement. Ruth was not represented by an attorney but Theo was.
In 2002, Ruth filed for a divorce. Theodore’s net worth had decreased to around $200,000, and Ruth’s $30,000 had dwindled to nothing. Ruth argued the prenup should not be upheld because she didn’t sign it voluntarily, didn’t have independent legal counsel, and didn’t receive full financial disclosure. These claims were rejected by the court.
The court found that Ruth had the opportunity to consult an attorney, understood the agreement’s purpose, and voluntarily signed it. The fact that it was presented only 2 days before the wedding doesn’t automatically render it unenforceable. She had plenty of time to get a lawyer and was denied the opportunity to do so.
As for the financial disclosure, the contract does contain a clause that says “Each party is possessed of real and personal properties, the nature and extent of which has been fully disclosed by each to the other.” Based on specific testimony from Ruth, the court declared that she had enough knowledge of Theo’s assets to be considered sufficient financial disclosure.
Will a Court Uphold a Spousal Support Elimination Clause in Every Circumstance in North Dakota?
We will spare you the anticipation: the answer is no, a court may not uphold your spousal support clause in every circumstance. The facts of the Sailer case are tricky, so we’ll skip them. What you need to takeaway from this important North Dakota case is that if a prenup eliminates spousal support, but in doing so, causes the spouse-in-need to require public assistance, the court may throw out the spousal support clause and force you to still pay it. We’ll say it again for the people in the back: if you waive spousal support in your prenup, but one spouse ends up on public assistance because of that, the court may still require you to pay spousal support.
In the Sailer case, the wife argued that her prenup which waived spousal support should be thrown out because it would cause her to be on public assistance. However, the court actually disagreed and said she failed to show she was in need of public assistance without spousal support. The court said since she did not qualify for public assistance at the time of the trial, she didn’t need the spousal support.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: [email protected]