Prenuptial agreements are private agreements that couples make before signing marriage documents. They set out the division of their assets in the event of a divorce further down the road.
Prenuptial agreements, however, aren’t the same in every state. Each territory has its own rules regarding prenuptial proceedings in the event that the couple decide to dissolve their marriage. The specific rules that apply relate to the state in which the couple got married, not where either of them are from. Because of this, couples will typically choose to get married in the state with rules that favor their situations the most. This way, they can protect their prenup and ensure that they divide assets as they originally intended.
If you don’t make a prenup, then the state’s laws determine what happens to your property when you separate. Usually, the state will assume shared ownership for the property acquired during the course of the marriage. So, for instance, if the divorce goes through the courts successfully, then they may divide the value of the house equally between both partners. In some states, debts incurred by one member of the marriage have to be paid by the other. And, finally, without a prenup, marital partners have the right to share in the management of property they use for marital purposes.
So what do you need to look out for to ensure that you are protecting your rights in a prenuptial agreement?
Ensure That The Prenup Is Valid
A prenup can only apply if the courts consider it legally valid. In the past, the law was quite severe with prenups. However, as they become more common, they are adjusting their attitudes.
Historically, courts would go over prenups with a fine tooth comb because they thought that they were a way for a wealthier spouse to easily break up with the less wealthy partner. But now that around half of all marriages fail, many legislatures and courthouses uphold prenuptial agreements as they are written.
Courts, however, will still look carefully at a prenuptial agreement in the event of a divorce. So it is critical that it is written up properly.
Some couples will draft their own agreement. However, if you decide to do this, you will still need to send it to each spouse’s lawyer for review. Don’t assume that just because you have an agreement in writing that a court will accept it at face value. In fact, if you haven’t had it checked by lawyers, that counts as a good reason for them to question whether it is legally valid or not. We can advise on prenups at The Law Offices of Thomas Stahl.
Conditions Under Which a Prenup Is Invalid
Prenups are binding legal contracts. Even so, there are various conditions, besides improperly prepared and filed agreements, that can invalidate them. These include:
- If either party signed the prenup without proper legal advice.
- If either party signed with reduced mental capacity or were under the influence of drugs at the time of signing.
- One party threatened the other or forced them in some manner to sign the prenup in the way that they did.
- The prenup was fraudulent because one of the parties did not disclose the full value of their assets.
Check That You Cover All Items
You’ll also need to make sure that you check that you’ve covered all items. These include:
Alimony And Spousal Support
This section of the prenuptial sets out how much spousal support is due to the other party in the event of a divorce. Some states allow you to include alimony arrangements as part of your prenup, but not all. In addition, states will not give clearance to agreements they deem as “punitive” that risk leaving one of the spouses in poverty.
You’ll also want to include a section on debt obligations. In many cases, creditors will seek to obtain marital properties when one spouse is a debtor. Prenups can help to protect the debt-free spouse from the debt of the other.
Another of the benefits of prenuptial agreements is the fact that you can specify how you’ll manage your household expenses. This breaks down how much each party must contribute to the running of the household.
The State Laws That Apply
Protecting your rights in a prenuptial agreement also requires clearly specifying the state in which the prenup applies. If you don’t do this, then the rules of the state in which the divorce is finalized will apply, not the one in which the couple are married.
Saving And Spending
You may also want to include a section that specifies your saving and spending plans as a couple—things such as your investment and retirement strategies. Some couples write down how much each must contribute to a joint account every month, based on their incomes. Many include special allowances, such as transfers of money from one to the other for specific expenses, such as looking after children or pets.
You can use prenups as a way to set out who receives financial benefits if one of you dies. For instance, a plan ensures that the wishes of the deceased spouse cannot later be altered by that of the surviving spouse.
Property Distribution In The Event Of A Divorce
Prenups can bypass many individual state laws on how the couple must distribute property in the event of a divorce. However, both parties must agree on the terms in advance of the marriage for the prenup to be legal.
The Bottom Line
As you can see, the benefits of prenuptial agreements are tremendous, and considerably greater than many people expect. Just remember, you cannot address child custody or support issues in a prenup. Those terms can only be decided by the courts in the event of a divorce. Family lawyer Thomas Stahl has helped countless Maryland and DC couples prepare prenuptial agreements. As a recognized Super LawyerTM since 2013, he has continued to prove his commitment to helping his clients achieve agreements that are effective and beneficial for their needs. Contact his firm today at (410) 696-4326 or (202) 964-7280, or online to schedule a consultation.