What Can and Cannot Be Included in a Prenup
A prenuptial, or premarital, agreement allows the parties to alter the basic framework of how marriage laws treat property. In general, everything a couple earns (or loses) during their marriage will be split in half at the end. One way to avoid this messy scenario is for a couple to use a prenup to lay out their own ground rules for dissolving their marriage if it ever comes to that. Courts have slowly come around to respecting prenuptial agreements, which were once highly disfavored. Here are a few general guidelines on what courts will allow.
What can be included in prenuptial agreements
The following items are ones that should be included in most prenuptial agreement and are generally respected by courts:
- Defined property categories: Each person comes into a marriage with a certain amount of liabilities and assets. Usually, each side’s finances will become so intertwined that everything the couple owns is considered marital (or community) property that must be split upon divorce. A prenup can usually clearly define some items as being outside the scope of the marriage and thus preserved for one partner.
- Saving property for previous children: In many second marriages the couple wants to save much of their existing assets for their children from their first marriage. This is an important thing to think about because otherwise a second spouse could inherit everything and decide to leave nothing for the spouse’s other children.
- Property distribution at divorce: Most states allow you to lay out the terms of your divorce beforehand. Rather than a costly and complicated division of assets, many prenups will require the more wealthy partner to pay the other a lump sum for each year they were married. Others wish to protect certain assets, saying for example that one spouse will get the house because it has sentimental value to his or her side of the family while the other spouse would take cash in the divorce settlement.
- Firewalling debts: Often a spouse does not want to be on the hook for debts incurred by the other spouse, like a failed business before they met. A prenup is a good avenue to keep that issue to one side of a marriage.
Related: Do’s and Don’ts of Prenuptial Agreements
What cannot be included in prenuptial agreements
The following items are generally frowned upon by courts and are unlikely to be enforced in most states:
- Anything impacting child care: Upon divorce, a judge will award custody and child support as the judge finds to be in the best interests of the child. So courts will rarely pay any mind to child-related provisions in a prenup.
- Anything that encourages divorce: Courts have long been skeptical of prenups because they were thought to encourage divorce. For that reason, courts continue to closely scrutinize any agreements that might encourage divorce. An example might be a rapidly changing cash sums to be awarded at divorce, because those might give incentives for one partner to get out of the marriage early for financial reasons.
- Personal issues: In general, courts hate to get entangled in complicated personal matters that a judge cannot realistically supervise. This is especially true in divorce. A judge does not want to get involved in dividing up chores, stopping bad habits, or correcting inappropriate (but legal) behavior.
- Legality: A prenup cannot help with illegal issues, meaning parties generally cannot agree to split up drug money or similar assets.
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