Prenups 101: Intro To Premarital Agreements

What is a premarital agreement?

A premarital agreement is a written contract between two people who intend to marry that affects their financial rights and obligations while they are married, if they separate or divorce, or when one of them dies. In a premarital agreement, a couple can agree to alter the rights and obligations they otherwise would have to each other as spouses. A premarital agreement is also known as a prenuptial agreement (a prenup) or an antenuptial agreement.

What subjects can be covered?

State law dictates what subjects can be addressed in a premarital agreement. The specifics can vary from state to state so it’s important to consult an attorney in your state to determine what provisions your state courts will uphold. Furthermore, each party should have a separate attorney at all stages of drafting and signing a premarital agreement. A premarital agreement is more likely to be upheld if each party had an independent attorney.

As a general rule, in a premarital agreement, prospective spouses can:

  • Relinquish rights to the other spouse’s income and property that they would typically acquire as a result of the marriage
  • Relinquish the right to inherit from a deceased spouse
  • Determine how property and liability for debts will be distributed between them (should the marriage fail)
  • Relinquish the right to alimony, or agree on how much alimony one spouse will pay the other
  • Determine whether one spouse will/won’t be obligated to pay the other’s attorneys’ fees if they separate

Provisions for custody and support of children born during the marriage are sometimes included in premarital agreements. However, a court will not enforce these provisions if they are not in the best interests of the children.

Courts typically refuse to enforce provisions regulating the behavior of the spouses during their marriage. These include provisions for living allowances and household expense accounts, division of chores, maintenance of personal appearance, and sexual activities.

You may find a premarital agreement especially valuable if:

  • You are an older or mid-life person who has accumulated significant assets that you want to protect if you divorce. The more assets a person owns, the more critical a premarital agreement becomes.
  • You want to avoid a contentious and costly fight over property and alimony if you divorce.
  • Your prospective spouse has significant debt or money management problems.
  • You have children from a prior marriage or relationship to wuom you want to leave your estate.
  • You own a business.

Some people resist a premarital agreement because they view it as an admission that the marriage is likely to mail. On the contrary, a premarital agreement can increase the likelihood that a marriage will succeed. A premarital agreement presents a couple with an opportunity to have a realistic discussion about how they expect to manage their finances and who they want to inherit their property. False assumptions can be exposed and examined before the marriage. Thus, the chances of marital conflict are reduced.

A young couple will not usually have as great a need for a premarital agreement as a more mature couple or a couple on a second/subsequent marriage. However, even a young couple should consider the issue before foregoing a premarital agreement.

Are you considering a premarital agreement? Do you have a drafted agreement that you need assistance responding to? Feel free to call our office for a consultation and expert advice.