Pre-Nuptial Agreements: Fact and Fiction
Pre-Nuptial Agreements: Fact and Fiction
By: Sharon L. Dyer, Esq.
The most common myth about Pre-Nuptial Agreements is that they are only for the rich.
You really don’t have to be wealthy to benefit from a Pre-Nuptial Agreement if you understand the purpose of such an Agreement.
Basically a Pre-Nuptial Agreement is a legally binding written contract between two people prior to marriage that sets forth what will be the financial rules of their marriage, especially in the event of divorce or death. If you do not have a Pre-Nuptial Agreement you are bound by the rules of the State where you reside and subject to those laws. Many couples prefer to make their own rules.
Protecting Property: A Pre-Nuptial Agreement can stipulate what interests each of you will have in the other person’s property.
Determining Support: A Pre-Nuptial Agreement can set forth what the obligations of each party to the other will be for support and contribution to the expenses of the marriage or post marriage in the event of a divorce.
Inheritance Rights: A Pre-Nuptial Agreement can also change or limit each spouse’s right to inherit property from the other.
A common scenario where a Pre-Nuptial Agreement is a good idea is when one party is involved in a family business. Upon divorce your spouse may have property rights to your family business, depending on how you acquired it and the facts of your particular case. Also, other family members may want protection from now being in business with your ex-spouse upon divorce.
Another scenario where a Pre-Nuptial is common is where two parties are entering into a second marriage later in life and each have children from a prior marriage. They may want to preserve their estate for their children upon death, and accordingly they need a binding agreement for each party to waive their spousal rights to the estate of the other.
Finally, many parties just simply don’t want the Courts involved in the event that they should divorce, and prefer to settle in advance what their support obligations and property rights will be. Given the fact that approximately half of all new marriages do end in divorce, it is not unreasonable to plan for this contingency.
Cannot Establish Custody and Child Support Rules: One topic that a Pre-Nuptial Agreement cannot provide for is custody and support of future children. This is considered too speculative and against public policy. A court always has the right to decide these matters in accordance with a child’s best interests.
In order for a Pre-Nuptial Agreement to be valid, important preparatory steps need to be taken. First, there has to be full financial disclosure between the parties. Additionally, each party should be represented by independent legal counsel. Finally, a Pre-Nuptial Agreement should be discussed and finalized well in advance of the wedding. If a Pre-Nuptial is suddenly presented to the other party on the eve of a wedding, it may not be enforced. Under such circumstances a Court may rule that a party was under duress and forced to sign without adequate time for proper contemplation and negotiation.
Courts can review Pre-Nuptial Agreements to determine if they were fair and reasonable when made and not unconscionable at the time of the divorce. Once again, if the Court believes there was over reaching, fraud or duress involved in the execution of the document, they will not enforce it. If you are contemplating a Pre-Nuptial Agreement you need to contact a family law attorney as soon as possible, preferably months before the scheduled wedding date, in order to better ensure the validity of the Agreement.
Many people consider the idea of a Pre-Nuptial Agreement unromantic. It can be a daunting process for some parties to discuss their finances and what they think would be fair in the event of divorce and/or death. For some couples these discussions are a painful eye-opener into the mind set of the other party. However, for those couples who ultimately do resolve their differences and enter into a Pre-Nuptial Agreement after such discussions, their bond is often stronger for having gone through the process. Ultimately, a Pre-Nuptial Agreement can provide peace of mind and a greater degree of certainty as to what the future will hold in the event of divorce or death.
Our Family Law attorneys at Levene Gouldin & Thompson are happy to meet with you to discuss a Pre-Nuptial Agreement if you are contemplating marriage.