updated September 1, 2023 · 8min read
Thinking about a prenuptial agreement before you get married? You're not alone. According to the American Academy of Matrimonial Lawyers, 62% of attorneys in a 2016 study said they saw a significant rise in prenuptial agreements, also known as prenups. The largest increase in prenups, they said, was among millennials.
But although more and more couples are entering into prenups, it isn't always a wise decision. One woman, who chose to remain anonymous, confessed that she signed her prenup because she believed she would earn enough money "that it wouldn't matter ultimately." But she admits she prioritized her marriage over her career, which didn't help to build her finances. "The prenup has always been a thorn in my side, and how our arrangement is so heavily skewed in his favor," she says.
But in other cases, prenups work well. One woman and her soon-to-be husband readily agreed to sign a prenuptial agreement. "It is a financial merger when you get married. Having a prenuptial agreement can prevent mental stress and increases the chance of the marriage succeeding." This was a second marriage for both of them, and after contentious divorces, an attorney emphatically stated, "If you remarry, please get a prenup."
How do you decide if you should get a prenup? Arming yourself with the knowledge of what a prenup can and cannot cover is the best way to protect yourself.
A prenuptial agreement is a contract between two people who are engaged to be married that covers what happens to the individuals' assets (financial or otherwise) in the event of a divorce.
Prenuptial agreements are governed by the 1983 Uniform Premarital Agreement Act. It has been adopted by 26 states in an effort to create consistent state-to-state enforcement.
Couples can include the following provisions as a part of their prenup agreement:
Some couples may have extra incentives to enter into a prenuptial agreement. Prenups provide protection in a variety of scenarios, including the following:
Prenuptial agreements don't always provide the best protection for individuals. Here are some scenarios in which a prenup may do some damage:
1. Both spouses weren't involved in the negotiations. If you are not both involved in negotiating terms or other aspects of the agreement, there is a chance it might heavily skew in the favor of one person.
2. It might cause discomfort and hurt feelings. The feelings prenups bring up can begin to color a relationship.
3. Friction with extended families. In-laws might be particularly offended that their son or daughter is entering into a prenup and may assume the marriage is "doomed"even before it has started.
4. The prenup is conditioned on future events. Some of the events outlined in a prenup may or may not happen, and it is hard to predict financial and future circumstances.
There's never a perfect time to bring up the subject of a prenup. But having this uncomfortable conversation with your significant other before getting married could potentially save financial and emotional stress for both of you should you decide to divorce. Plan to have this conversation early in the engagement instead of a few weeks before the wedding. Couples who have significant individual assets or debts, dependents, and small businesses should definitely discuss a prenup as soon as marriage is on the table.
Here are some ways to navigate the initial prenup discussions:
It is possible to draft a prenuptial agreement on your own, but be aware that it may be unenforceable if it is determined by a court that certain requirements aren't met.
Evidence of technical errors, coercion, and disproportionate terms could invalidate a prenuptial agreement. In addition, certain states have complicated requirements for prenuptial agreements. Judges will evaluate a prenuptial agreement and decide whether it is fair for both parties in the event of a divorce.
A prenuptial agreement, when properly negotiated, can protect the following assets and interests:
If a judge, however, feels that the agreement is unfair or conflicts with a legal standard, these provisions can be unenforceable. This can vary from state to state.
A prenuptial agreement does not cover the following:
1. Child custody or visitation matters.
2. Child support.
3. Alimony in the event of a divorce.
4. Day-to-day household matters.
5. Anything prohibited by the law.
The short answer is yes. A prenuptial agreement can be legal and binding if executed correctly and in accordance with the law. Whether certain clauses are upheld will depend on state law.
A prenuptial agreement may be found invalid for the following reasons:
If parties have a prenup in place during estate planning, make it clear which document takes precedence. To avoid costly litigation in the future, the parties can resolve any disagreement with the prenup by using appropriate language to clarify which document takes precedence.
When it isn't clear which document takes precedence and the terms of a prenuptial agreement conflict with a last will and testament, a probate court carefully examines the terms of the prenuptial agreement. The court is likely to find that the terms of the prenuptial agreement take precedence over the terms of a last will and testament.
A prenup should indicate which law the reader should use to interpret it. If the prenuptial agreement does not contain this information, and a spouse dies in a state other than the state where the couple created the document, the laws in the state of the spouse's death take control. A prenup sometimes contains a "sunset" clause, which sets an expiration date for the agreement. After that date, a will automatically takes precedence.
If the beneficiaries of the last will and testament can show that the prenuptial agreement is invalid, the court will not enforce its terms. This might occur if a spouse entered into a prenup under duress.
There are nine states that are community property states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. This means assets are distributed equally in the event of a divorce. But if a prenup agreement is in place, the terms of that agreement override the community property rules.
You can get a prenup after marriage—this is called a postnuptial agreement. A postnuptial agreement is a contract established between a married couple that will establish how to divide marital property and financial interests in the event of death or divorce.
A postnuptial agreement must be in writing, voluntarily entered into and signed by both parties, and notarized.
A postnuptial agreement could deal with inheritance issues, debt, and custody of children. It could also require a spouse to pay monetary support after a divorce.
by Siege Media, contributor to LegalZoom
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