What Can and Cannot be Included in Prenuptial Agreements
Before getting married, no one wants to consider getting a divorce. Prenuptial agreements, often known as premarital agreements or prenups, assist in establishing specific conditions if the marriage terminates.
For instance, in the event of a divorce, a person with a legacy family business may try to shield those assets from the opposing side.
A prenuptial agreement has several restrictions on what can be written in it. This article gives a general summary of what prenuptial agreements may and may not contain.
What May Be Covered by a Prenuptial Agreement
Prenuptial agreements frequently contain distinctions, safeguards, and clauses pertaining to money. The parts that follow in this article go into more information about several prenuptial agreement sample clauses.
Property division distinctions (marital vs. separate property)
What constitutes separate property and what constitutes marital property is governed by specific legislation in each state. Some states have “community property” rules, which frequently provide for equal asset distribution.
The court will divide all marital assets in accordance with state law upon separation brought about by death or divorce. You can utilize a prenuptial agreement to prevent a judge from deciding what happens to the property you acquired during your marriage.
Which assets ought to be treated as separate properties can be specified in the prenuptial agreement. This could be real estate you held before to the marriage or belongings from a previous marriage.
Other assets will be regarded as marital assets and divided by the court if they are obtained after the marriage is consummated.
In some states, you can choose whether you’ll receive alimony payments or not. Some states forbid doing this. When preparing the prenuptial agreement, make sure you are aware of the legal requirements in your state or consult a family law attorney.
Protections against the Debts of the Other Spouse
If there is no prenuptial agreement, creditors may seize marital assets even if only one spouse owes money. Limit your debt liability in a prenuptial contract to prevent this.
Arrangements for Children of Former Relationships
A prenuptial agreement might be used if you have children from a prior relationship and want to make sure they inherit any of your possessions.
Protections To Maintain Family Ownership
If you have a family artifact, family company, potential inheritance, or other item of property that you wish to maintain in your birth family, you can state it in your prenup.
Estate Plans’ Protections
Prenuptial agreements are just one step in making sure your estate is distributed according to your preferences. Keep in mind that additional papers, such as wills and living trusts, must be drafted and kept secure.
Descriptions of Spouses’ Responsibilities
There are several justifications for a prenuptial contract. The following list of items is typical in prenuptial agreements:
Income, claims, and deductions for submitting your tax returns
control of home expenses and bills
control of any joint bank accounts
Investment agreements for specific purchases or endeavors, such as a home or business
control over credit card payments and usage
Distribution of property to the survivor in the event of death, including life insurance
arranging for one of you to attend school.
Resolution of possible disputes through mediation or arbitration
What Prenuptial Agreements May Not Contain
What can and cannot be mentioned in prenuptial agreements is governed by state law. The following is a list of things that the majority of states prohibit in prenuptial agreements:
Dispositions Outlining Any Illegal Activity
You are not allowed to include any illegal provisions in your prenuptial agreement regardless of the state. By doing so, the entire prenuptial agreement or specific portions run the risk of being thrown out.
Making decisions about child support or custody
Child support and custody clauses are not permitted in prenuptial agreements. The determination of child support is ultimately up to the court. The “best interest of the child” standard is used by the court to decide child support.
Prenuptial agreements that include child support, custody, or visitation cannot be upheld by the court. This is due to the fact that it is against the law.
What is in the child’s best interests is decided by the court. They wouldn’t take away the child’s right to support or the chance to interact with a healthy parent.
Losses of Alimony Rights
This is the clause that judges most frequently strike down. Several states outright forbid this.
Some states frown upon it and place restrictions on your capacity to renounce your alimony rights. Alimony waivers are legal in some states. Make sure to research the laws of your particular state.
Prenuptial agreements are carefully examined by judges to search for anything that provides a financial incentive for divorce. If a clause could be seen as encouraging divorce, the court will invalidate it.
Any clause detailing how property would be divided used to be seen by courts as favoring divorce. Judges pay close attention because society wants to avoid divorce.
Information Regarding Personal (And Not Financial) Issues
Personal preferences cannot be included in a prenup. This could include agreements over who would do what tasks, where to spend the holidays, whose name to use, child-rearing specifics, or how to interact with particular relatives.
Prenuptial agreements are made to handle problems with money. Any clause addressing subjects other than money will not be upheld.
When a contract mentions personal domestic issues, judges become uneasy. They frequently reject the document because they think it is pointless.
If you and your spouse want to reach an understanding on such issues, do so in a different document. Just be aware that a court would not be able to enforce this document.
Obtain legal guidance for prenuptial agreements
Prenuptial agreements are advantageous to both parties since they establish the parameters of a marriage before issues occur.
But before being signed, every prenup should be thoroughly reviewed by an attorney. Critical mistakes may render the entire agreement or a portion of it invalid.
To get legal counsel and peace of mind, contact a local family law attorney right now.
Prenuptial Agreement Pros
- Prenuptial agreements serve the purpose of protecting children and grandchildren’s inheritance rights from a former marriage.
- A premarital agreement can protect a professional or business practice so it does not become divided and your former spouse does not have involvement or control of the business should you divorce.
- A premarital agreement can protect a spouse who is debt-free from assuming debt obligations the other party has.
- A premarital agreement can ensure you will be fairly compensated should you be giving up a successful and lucrative career should the marriage not survive.
- A premarital agreement can put in writing any responsibility and decision making sharing the parties agree too, prior to marriage as well as addressing financial aspects of the marriage.
- The amount of spousal support one spouse will have to pay the other if the divorce can be decided in a premarital agreement.
- The finances of older persons or persons of substantial wealth entering into their second or more marriage can be protected with a premarital agreement.
Prenuptial Agreement Cons
- You may have to concede your right to inheritance from the estate of your spouse when they pass away. However, the law states you are entitled to a portion of the estate if your spouse has not made a provision for such in their will.
- You may be entitled to a share of the increase in the value of a business your spouse owns if you have made a contribution such as taking care of the home or entertaining clients. However, in a premarital agreement, you may not be entitled to claim a share of that increased value. In many states, the law says the value increase is marital property considered to be divisible.
- A lack of trust may result from commencing a relationship with a contract at the outset.
- It is tough to see how issues in the future may be handled so keep in mind, seemingly simple compromises made in the romantic period before marriage may have a significant impact later on.
- A spouse who does not earn a wage or earns only a low wage may not be able to keep the lifestyle they have become used too while in a marriage if the agreement has spousal support limits the spouse has an entitlement too.
- Every relationship has its honeymoon stage where a spouse who is in love will not make wise financial decisions as they cannot see the relationship ever terminating. A prenuptial agreement helps with this.
Get Professional Legal Assistance To See If A Prenup Is Right For You
If you, or you and your future spouse are together thinking about a premarital agreement, it is vital to look at the pros and cons at the outset. The experiences of a family law attorney can be very helpful and it is paramount each partner consults a different attorney from different law firms, to make sure the rights and interests of each partner are represented.
“Pros and Cons: Prenuptial Agreements.” Findlaw, family.findlaw.com/marriage/pros-and-cons-premarital-agreements-prenuptials.html.
Contact Our Prenuptial Agreement Lawyers in Scottsdale
Consulting with a talented Scottsdale prenuptial agreement lawyer or family law attorney who is knowledgeable and experienced in drafting and litigating premarital agreements will save you a great deal of grief and expense in the future. Contact Canterbury Law Group today.
*This information is not intended to be used as legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs. 480-744-7711 or [email protected]