Very few people, upon planning a marriage, are eager to contemplate a divorce. This is understandable. Unfortunately, however, the reality is that approximately one in three marriages do end in divorce. This unfortunate but real possibility has led many to consider entering into prenuptial agreements. There is a common misconception that prenuptial agreements are only for those who are wealthy, those who have children, or those who are being married for a second time, but this is simply not true. One advantage of prenuptial agreements is that they force parties to take a close look at their finances and discuss important financial matters prior to entering into the marriage. At the very least, it is important to be informed as to what prenuptial agreements cover in order to determine if having one is in the best interest of your marriage.
Essentially, a prenuptial agreement is a contract that functions as a type of insurance policy. Prenuptial agreements are designed to protect the individuals that enter into them from complications and legal ramifications associated with divorce and death. The agreements may address any number of matters, but matters most commonly addressed include:
- Predetermining Division of Assets: In a typical divorce, one of the first tasks is to identify and allocate separate and marital property. Separate property usually includes the assets of a spouse owned before the marriage or which were acquired through a gift or inheritance. Marital property, on the other hand, includes assets that the spouses acquired during the course of the marriage. In a typical divorce, courts in some states will seek to split the marital assets equally, based upon an idea of equitable distribution or what is “fair”. In other states, marital property is divided according to an even 50-50 split. Prenuptial agreements are a way for couples to ensure that their property is divided in the manner that they wish and to avoid a lengthy legal battle over their property in the event of a divorce.
- Setting Forth Terms of Alimony: It is not at all uncommon for one spouse in a marriage to earn more than the other. Depending upon state laws, following a divorce, one party may be entitled to spousal support (which in some states is called alimony) from the other. This support can include either temporary or long-term payments and, absent a prenuptial agreement, the amount will be determined by the court after consideration of all legal and circumstantial factors. For those who would like to avoid the uncertainty of a court decision on these matters, prenuptial agreements may be a wise move.
- To Agree to Law Different Than Default: In the absence of a prenuptial agreement or some other legally binding contractual agreement, in the event that one party to a marriage passes away, state law would control the division of assets, inheritance, and other matters pertinent to the end of the marriage. For example, many states do not allow one to disinherit their spouse. Thus, in the absence of a prenuptial agreement, even if you and your spouse are estranged, in the event of the death of one spouse, the remaining spouse inherits a portion of the estate. In a prenuptial agreement, however, one spouse can waive his or her right to a share of the other’s estate, should the parties choose to do so.
A prenuptial agreement cannot:
- Determine Child Custody or Support: Certainly, divorcing parents can (and should) work together during the divorce process to decide how to handle matters involving their children. Matters like division of parenting time, child support, primary custody, who will have the children for holidays and vacations – all of these things are important, and negotiation between two parents who know the children best and care deeply for them is the best option. The parties can enter into a custody agreement, which ultimately will need to be approved by a court, but cannot do so prior to the time the marriage begins. Likewise, a court will set child support after evaluating income, best interests of the children, standard of living, and other factors that may vary by state. These decisions cannot be agreed upon in a prenuptial agreement and are ultimately only decided during the actual divorce process.
- Miscellaneous “Lifestyle” Clauses: Increasingly, people are attempting to include lifestyle clauses in prenuptial agreements – clauses regarding any number of matters from household cleanliness, to frequency of sex, to punishments for infidelity – the list could be endless. While there is no prohibition against including these types of clauses in prenuptial agreements, they are, in most cases, unenforceable as they have little legal support and are typically difficult to prove.
Thus, while prenuptial agreements cannot cover every potential issue of dispute that may arise in a divorce, they can go a long way toward doing so. The advantage of a prenuptial agreement is that parties are often able to contemplate important matters and agree to them at a time when they are calm and clear-headed as opposed to trying to make these decisions in the midst of the often tumultuous circumstances that commonly surround divorces.
Prior to entering into a prenuptial agreement, most states will require that each party provide to the other a list of all assets that they possess, as well as any debts, along with any supporting documentation that might be available prior to entering into a prenuptial agreement. A full and fair disclosure of this nature will help to ensure that one parties does not later claim that they were unaware of what they were agreeing to when they signed the agreement. Those who are contemplating doing so should consult with appropriate financial and legal advisors to make sure that they are providing all necessary information for an agreement to be fair and legal.
The requirements for prenuptial agreements do vary from state to state. As a result, it is wise to consult with an attorney in the state where you are planning to enter into a prenuptial agreement to learn the particulars of the law in that state before actually entering into the agreement. Doing so, and entering into an agreement that you and your spouse feel is best for your particular situation, can have lasting benefits for yourself, for your spouse, and for your peace of mind. Call 303 Legal, P.C., to schedule an appointment or contact us online. We’re here to help with your prenuptial agreement!