A prenuptial agreement, also commonly known as a prenup, is a contract entered into by two individuals who are about to get married. This agreement outlines the financial obligations of both Parties and includes a plan of how to divide assets and debt obligations if the marriage ever comes to an end. Prenuptial agreements are often associated with individuals who have a large amount of assets. However, a prenuptial agreement can be used in many situations, such as the following:
A thorough and successful prenuptial agreement can drastically speed up divorce litigation, or even avoid it altogether in the event of a divorce. For more information about prenuptial agreements, please refer to the guide Tackling Tricky Topics: The Ins and Outs of Prenuptial Agreements.
A postnuptial agreement is similar to a prenuptial agreement because both documents outline the terms of a potential separation or divorce. However, a postnuptial agreement is distinctive because it is created after the couple has already been married. In contrast, a prenuptial agreement can only be created before the couple is married.
No, it is not mandatory to have a prenuptial agreement.
However, having a prenuptial agreement is highly advised, especially for couples with numerous assets, pre-existing children, or high debt. As challenging as it can be to contemplate the potential end of a marriage just as it is beginning, a prenup is a way to make agreements about difficult and contentious topics while still on loving terms. This helps the couple avoid more acrimonious or retaliatory behavior down the line if things turn sour. Further, a prenup allows a couple to avoid subjecting themselves to the arbitrary and ever-changing laws of the state that will govern in the event of a divorce without a prenuptial agreement to guide it. For many couples, it is much easier to create a prenuptial agreement at the start of a marriage than to create a divorce agreement at the end of that marriage.
Physical custody refers to where the couple's children would live if they divorced. Physical custody can be shared between two parents, meaning that children would split their time and live with both parents. Alternatively, one parent could have sole physical custody, meaning that the children would only live with one parents.
Legal custody refers to who would make important decisions concerning the children, such as what medical treatments they will receive, where they will go to school, what, if any, religious education they will receive, and other such issues. Just as with physical custody, legal custody can be shared between two parents, meaning both parents get input into these decisions, or one parent can have sole legal custody, meaning they get to make the final decision by themselves.
Marital property is any property or debt acquired by the couple during the course of the marriage. This could include homes, cars, stock options, retirement accounts, mortgages, credit card debt, or any other type of tangible or intangible property or debt. This property is subject to division during the divorce. It does not include any property that a party already had before entering into the marriage, like a home that was already owned by one member of the marriage before the marriage took place.
A valid prenuptial agreement must contain at least the following mandatory clauses:
In addition to the above mandatory information, the following information may also be included:
NOTE: A judge can revoke the spousal support agreed to in a prenuptial agreement if they believe it will leave one party destitute or if it is otherwise considered one-sided or unfair, even if the parties initially agreed on the terms.
Since child support is ultimately a matter for the courts to decide, the prenuptial agreement does not address this issue. The judge has the final say on who will pay support and how much they will pay.
For a couple to create a valid prenuptial agreement, they must not be married when they create and sign it. If they are already married and wish to create something like this, they must use a postnuptial agreement instead.
The most important way to protect the validity of the prenup is for both parties to make an honest and complete financial disclosure to each other, listing all assets and debts. Each party should know what they are gaining and giving up by signing the agreement. Nothing should be concealed, no matter how small the account or whether the account is based in another country. The risk in not disclosing fully is that the agreement will be challenged in court by the other party based on the argument that the agreement would not have been signed in the first place if the missing item had been disclosed.
The second major strategy to avoid any potential future challenge of a prenuptial agreement is assuring there is ample time before the wedding for both parties to discuss, read, and review the agreement. One of the common arguments made when trying to set aside a prenuptial agreement is that the agreement was created and signed such a short time before the marriage that there was pressure to get it signed without close review by both parties and any further negotiation of the terms of the agreement. While some states have specific guidelines about timing, generally, there is no concrete guidance about how long one should wait between signing a prenup and the wedding ceremony. The most common rule of thumb is that there should be at least a two-week wait between the signing of the prenup and the start of the marriage.
The parties should make every effort to complete the agreement well in advance of the marriage; thirty days is a common guideline. Further, they should both have a reasonable amount of time to review the completed agreement prior to signing. After completing the Agreement, the parties may independently consult attorneys. The parties may agree to each consult with an attorney prior to executing the document due to the nature of the important and personal rights involved. If desired, there is an option to sign the document in front of their attorneys and have their attorneys complete paperwork acknowledging that they've witnessed the signing of the document. The Parties do not need to file their agreement anywhere once it is completed. However, signed copies of the document should be kept in a safe and secure location such as a safe, bank safe deposit box, or with an attorney.
Prenuptial Agreements are a matter of state law, with different states having different requirements dictating the enforceability of a Prenuptial Agreement.
As of 2017, 27 states (Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Texas, Utah, Virginia, and Wisconsin) have signed onto the Uniform Premarital Agreement Act. This Act addresses the varying standards regarding Prenuptial Agreements that have lead to varying laws and questionable enforceability as couples move from state to state. This Act dictates that if a prenuptial agreement is deemed enforceable in one of the states that has signed on, it will be enforceable in all the other states that have signed on.
In determining matters related to children, such as child custody, visitation, and support, a Court must approve any arrangement using a "best interests of the child" standard. Generally, if both parents come to an agreement regarding these matters, a Court will be willing to include the agreement in the official legal documents. However, the possibility remains that a Court will require an adjustment of the agreement if they determine that the arrangement is not in the best interests of the child(ren) involved.
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