A prenuptial agreement, or prenup, is a contract created and signed by a couple before they get married to determine how financial assets and liabilities will be divided in the case of divorce. But does every couple need one? What do you need to include in a prenup?
Understandably, we field a lot of questions about prenups. That’s why we’ve provided answers to the most common prenup questions.
- Who should consider a prenup? Ultimately, this decision is up to each couple. However, you may want to think about a prenup if:
- One or both parties own or co-own a business
- One or both parties have been married
- One or both parties have children
- One or both parties may receive a large inheritance
- One or both parties expect a significant rise in income
- One party plans to support the other financially with post-secondary education
- One party plans to be a stay-at-home parent
- One or both parties owns vulnerable property (estate, stocks, or savings)
- One or both parties hopes to keep their personal lives private
- What is decided in a prenuptial agreement? When forming a prenup, couples make decisions about the following:
- Division & ownership of debts
- Division & ownership of property
- Spousal support
- Property inheritance
- If I have a prenup, can I avoid litigation in case of divorce? Yes, but there’s no guarantee. A well-written prenup can certainly speed up — and perhaps even negate the need for — divorce litigation.
- Do all finances need to be disclosed before entering a prenuptial agreement? Yes. This is essential. Your prenup may not hold up in court if it’s later discovered that one party withheld assets when the agreement was made.
- What’s best left out of a prenuptial agreement? A prenup doesn’t have merit when it comes to child custody, child visitation rights, or child support payment issues; those issues are decided in court based on the child’s best interest at the time of divorce. Additionally, clauses concerning anything except property and finances are not binding in court and may invalidate your prenup (so, no provisions requiring your spouse to wash dishes every night).
- What makes a prenuptial agreement valid? Prenuptial agreements are valid if:
- They’re written, signed, and notarized
- Both parties have fully disclosed all financial liabilities and assets
- Each party has retained their own lawyers to make sure they’re getting independent legal advice (that is, if they choose to have legal representation)
- There’s no evidence of coercion, duress, or undue influence
- Agreed-upon provisions are legally allowed
- When should we sign a prenup? The sooner you sign your prenuptial agreement, the better. It’s wise to start the process well in advance of your wedding so both parties have ample time to consider the agreement before the ceremony.
- What is considered “property”? Property is anything owned. In your prenuptial agreement, your property will be divided into 2 groups: “real property” (land or real estate interests) and “personal property” (savings accounts, stocks, bonds, vehicles, valuable antiques, and basically anything else you own).
- What are Separate and Marital Property? Separate Property is that which will not be divided between the parties if they split up. The couple agrees that this property will go to just one of the parties. Meanwhile, Marital Property comes with greater uncertainty, as it is property that the couple either bought together or considers as belonging to both parties.
- Which state should I list as Governing Law? The Governing Law should be the state of your primary residence or the state you’ll primarily reside in during your marriage.
- Where do I file my prenuptial agreement? Nowhere! Once your prenup is finalized, just put a few signed copies away somewhere safe.
If your questions about prenuptial agreements are still unanswered or you are in need of an attorney to represent you during your prenup process, contact Mulligan Attorneys at 910-763-1100. We are happy to help!