Too often, the very mention of a “prenuptial agreement” causes anxiety in relationships. This is because some people associate these agreements with a lack of trust. In reality, executing a prenuptial agreement can bring a couple closer together. This is because it places both spouses-to-be on the same footing, with the same knowledge of their mutual finances before they enter into marriage. Prenups also help couples identify and address differing expectations about how their finances will be handled—before any misunderstandings arise.
A prenuptial agreement is an agreement a couple signs before they get married.
These agreements go by many different names: prenups, antenuptial agreements, and premarital agreements.
Prenuptial agreements are actually contracts made by partners in contemplation of marriage. In other words, the partners are agreeing to how certain things will be handled or decided after they get married.
The requirements for valid prenuptial agreements vary from state to state, and a licensed, experienced lawyer in your state can advise you about what those requirements are. However, there are two essential prerequisites in every state: prenups must be entered into voluntarily by both parties, and both parties must make full disclosure of their finances before the agreement is signed.
The voluntary requirement is designed to ensure that neither party is forced to sign an agreement with which he or she disagrees.
This prerequisite can take many forms:
- Time limits on when the agreement must be signed (for example, no less than 30 days before the wedding); and
- Advice requirements, such as requiring that both spouses-to-be have independent legal advice before signing.
- Prenups can be used to address many issues faced by new couples, like these:
- Whether to treat property owned before marriage as the separate property of one spouse or as marital property (such as a home or a car);
- Whether debt that pre-exists the marriage will remain the separate debt of that partner or will be treated as marital debt (for example, a student loan or mortgage); and
- How to treat children that preexist the marriage (such as by setting aside money or assets for them to inherit).
Many couples also use prenuptial agreements to set forth how they would like to treat spousal support in the event of divorce. For example, some couples choose to waive any right to spousal support (often known as alimony), while others set forth the amount of support to be given. Whether these agreements will be enforced depends on the laws and requirements of your state.
Who Needs a Prenuptial Agreement?
Without a prenuptial agreement, state law will determine how important issues will be handled in the event of separation, divorce, or even death. For example, state law sets forth requirements for whether property or debt is treated as separate or marital. It also contains requirements for how spousal support is determined. When a couple has no prenuptial agreement, they are allowing state law and the court system decide these issues on their behalf.
If couples want to take these matters into their own hands, they should have a prenuptial agreement. The best way to make this decision is to learn how the law in your state will treat important issues if you do not have a prenup. An experienced, licensed family lawyer can help you understand how the family and inheritance laws work in your state so you can make the best decision.