Prenuptial Agreements Verses Postmarital Contracts
The issue of prenuptial agreements tends to get sensationalized in the media, especially when celebrities with high net worths decide to divorce. However, most prenuptial agreements are much less exciting and much more common than most laypersons realize. Before we discuss some of the reasons and requirements for prenuptial agreements, it will be helpful to look at terminology and definitions.
Prenuptial agreements are executed before the marriage and are also referred to as antenuptial agreements, premarital agreements, prenuptial contracts, or prenups for short. Agreements made after the marriage is in place are referred to as postnuptial, postmarital, or simply marital agreements.
What is a Prenuptial Agreement?
While the concept of a contract isn't always the first thing that a person thinks of when they hear the word "marriage", that's exactly what it is. Marriage is a contract between two people who agree to live their lives in a certain way. This often includes having and raising children, where they live, what they buy, who they give gifts to, and how they spend their time. A prenuptial agreement is simply a second contract that spells out a couple's wishes with respect to one or more of those decisions both during the marriage and in the event it ends.
For example, a couple entering a second marriage with grown children may want to keep their property separate to protect the inheritance rights of those children. In fact, this is a very common reason for prenups. But there are others that include:
· Protecting one of the spouses from the prior debts or obligations of the other, such as student loans, medical bills, or charitable gift commitments
· Keeping a prior business, real estate holdings, or other assets separate from the marital assets
· Clarifying rights or obligations of each person during the marriage, perhaps with respect to bank or investment accounts
· Avoiding prolonged and public litigation in the event of a divorce
Of course, there are many more reasons for premarital agreements, each with its own advantages and potential pitfalls. This is why having experienced legal counsel is so important when creating these arrangements.
What Makes a Premarital Agreement Valid?
As with any legal matter, the laws of a particular jurisdiction will control whether an agreement is valid and enforceable. Therefore, you will want to be careful to consider how a change in residence during the marriage may or may not impact the validity of your agreement. With that said, there are a few requirements that are generally standard for determining whether a prenup will be enforced:
· The document must be written and signed by both parties. Witness signatures and notarization are also common requirements.
· The agreement must be entered into voluntarily and without any coercion. Certainly threatening someone to sign a prenup is grounds for invalidity. However, presenting a fiancé with a prenup very close to, or on, the wedding day may also be considered coercive.
· Both parties must disclose their true financial situations and cannot hide assets, liabilities, or other aspects of their net worth.
· The terms of the agreement must be conscionable and cannot put either party at a severe disadvantage.
In addition to the above, both parties to a prenuptial should be represented by legal counsel. While not required, having only one person represented by an attorney can cause problems later when a court is evaluating the fairness of the agreement.
Contact Our Experienced Prenuptial Agreement Attorneys Today
If you have marriage plans and are considering a prenuptial agreement, please contact our office today to speak with an experienced family law attorney. All information you share is kept strictly confidential, even if you decide not to hire our law firm or end up completing a premarital agreement. However, after your consultation, you will have answers to the most important questions as well as a clear path forward for achieving your goals. We look forward to speaking with you.