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Prenuptial Agreement

Article | 20 December 2021

When you hear the phrase “prenuptial agreement,” you may immediately think of Hollywood weddings gone wrong. The idea that prenuptial agreements (or “prenups”) are only important for high net worth individuals is, however, a common misconception. Prenuptial agreements can serve an important role for any couple preparing for marriage.

What is a Prenuptial Agreement?

A prenuptial agreement is a written contract between a future married couple that defines each of their property assets and how these rights will change after the marriage. Prenups are most commonly associated with divorce, but there are a number of reasons to consider drafting a prenuptial agreement before marriage.

When to Consider a Prenuptial Agreement

While contemplating a future divorce may not feel natural to two individuals preparing for marriage, it is an important consideration. A prenup can be a valuable tool for any couple, regardless of the value of their assets. When a couple is deciding whether a prenup makes sense, the following should be taken into consideration:

  • Future Legal Complications
    In the unfortunate situation of a divorce, fighting over assets can be avoided with a well-drafted prenup. A prenup allows a couple to think through financial implications with a clear head rather than fighting about them down the road when emotions may be more charged.
  • Separate Assets
    Do you or your fiancé have assets you would like to carve out from your community property? One common example is if one person has children from a prior marriage. A prenup can specify which assets are earmarked for these children.
  • Debt Protection
    Couples may enter a marriage with vastly different financial pictures, including varying amounts of debt. A prenup allows you to allocate debt as separate or marital, ensuring that the more financially stable party won’t be responsible for certain debt in case of divorce.

Important Prenup Considerations

Some considerations when drafting a prenup include:

  • Any real property owned by either party;
  • Consideration of all assets;
  • Analysis of any debts, including possible future debts;
  • Ownership interests in any businesses;
  • Retirement accounts and benefits; and
  • Any other possible beneficiaries of certain property

How to Nullify a Prenuptial Agreement

  • Duress/Coercion
    A prenuptial agreement can be nullified if one party signed the agreement under significant duress or coercion. Some examples include signing the prenuptial agreement without adequate time to review the document (such as hours before the wedding).
  • Failure to Disclose
    If a prenuptial agreement fails to mention assets or debts of one of the intended spouses, there is grounds for nullifying the prenup. Spouses who sign a prenuptial agreement without knowing the entirety of their partner’s financial situation don’t have all the information necessary to agree to the listed terms.
  • Unfair Division
    In the case that a prenuptial agreement is vastly in favor of one party over the other, the agreement can be nullified. It’s important to note that an uneven division of assets is not enough to nullify the prenup; the disparity between the two parties must be extreme.

All three of these methods simply provide grounds to challenge the prenuptial agreement in court; the document is not automatically null for any of these reasons. In some cases, spouses are willing to settle outside of court, in which you should have a legal representative present to oversee the process.

Does a Prenuptial Agreement Survive Death?

In the case of the death of a spouse, there may be some conflict between the terms stated in a prenuptial agreement and the terms stated in the deceased party’s will. Because a prenuptial agreement is considered a contract and the other spouse is still living, in many cases a prenuptial agreement supersedes the contents of a will. 
Making sure your prenup is comprehensive can be stressful. Contact us today for assistance.