Many people think of prenuptial agreements as only for the super-rich and wealthy. But a prenuptial agreement may be even more important for people even if it doesn’t look like you have as much to lose.
What’s a Prenuptial Agreement?
Also called an antenuptial agreement, or premarital agreement, a prenuptial agreement is a contract two people enter into before marriage. Ahead of time, they lay out how to divide their assets in the case of divorce, separation, or annulment. Essentially, it’s a way to protect your property, possessions, and resources should things not work out.
Beyond the division of property, premarital contracts also often include other topics. Some contain child custody arrangements, spousal support provisions, and an infidelity clause.
Making agreements about how property should be divided after marriage can, not only help you avoid expensive and confrontational divorce litigation, but you can also enter your commitment fully informed upfront of what each other’s financial expectations will be going into the marriage or relationship.
Enforcing Prenuptial Agreements: Do They Hold Up In Court?
When looking to enforce a prenuptial agreement, the court first examines whether or not it’s substantively fair. They want to make sure it makes reasonable provisions.
As long as it doesn’t tip drastically one way or disproportionately benefit the wealthier spouse, it may hold up. Other factors they consider:
- The court also looks at how the two individuals entered into the agreement. If two spouses enter the arrangement with drastically different levels of power, a judge may throw it out. In these situations, it falls to the spouse looking to apply the terms to prove their case.
- They consider the value of the property in question, and there must be full disclosure of assets and debts. It’s hard to enter into a binding contract if you don’t know the true value.
- Courts also examine the terms and determine if both parties entered into the contract with full knowledge and equal footing.
- Spousal support provisions can be enforced, but not always. If they skew sharply one way or another, in an unfair direction, the court may toss them.
- You typically can’t enforce lifestyle provisions, like not gaining weight or maintaining physical appearance. In general, you can’t include any egregious or unconscionable requirements.
The prenuptial agreement must also be reviewed and executed well in advance of the marriage. Courts view dropping a prenuptial agreement at the last minute as coercive. You need time to properly examine the document and have it examined by an attorney. Essentially, the goal is to make sure no one takes advantage of anyone else.
Do You Need a Prenup?
So, do you need a prenuptial agreement? That’s a complicated question without an easy or universal answer.
Some people view them as pessimistic like you’re betting against your marriage. Even if you worry that a prenuptial agreement may doom your marriage or become a self-fulfilling prophecy, there are a variety of reasons to consider this course of action.
- They can protect pre-existing assets or guard you against liability for your spouse’s pre-existing debts.
- If you have a business that predates the marriage, you can use a prenuptial agreement to ensure it remains yours. Unless you want your ex as an unexpected business partner. Any established business partners will probably appreciate the consideration.
- If you anticipate receiving an inheritance or have a family estate, they can protect that.
- If one spouse quits a job in order to care for your children, such a contract may guarantee that the financial responsibility doesn’t entirely fall on the non-working spouse in the wake of divorce.
Whether or not you need a prenuptial agreement is, in the end, a personal choice. They can protect you, your family, your assets, and your business, among other things. But it’s up to you to make the call.