Prenuptial Agreement

What is a Prenuptial Agreement?

Unlike what you see on social media sites these days, a prenuptial agreement (or prenup for short) is a type of contract that tells what assets to divide among each other if in case a marriage fails and the couple decides to split. It’s just like an employment contract or a business contract. Like how you’d write the last will in case of death, you would write a prenuptial agreement in case of death of a marriage. While there is no need to notarize a prenuptial agreement, for validity purposes, it’s crucial to have the lawyer draft an affidavit to make it legally binding. It is also vital that lawyers from both parties have to be present during the drafting of the prenuptial agreement to make the contract fairer and unbiased.

In case of a divorce, prenups help the two parties avoid conflict based on what they have agreed on pre-marriage. While a prenuptial agreement is not necessary, it has become essential in every marriage. Think “contingency plan.” It’s not the sexiest topic that a couple can talk to each other about. But just like in any aspect of life, it’s better to plan than legal shoulder fees trying to settle what goes to who during a divorce settlement case. It certainly isn’t the most romantic topic out there for a couple, but it’s something you may need to think about in case of an emergency. While it’s not great to talk about divorce before even getting married, a prenuptial agreement will help douse a fire before it even starts.

Do I Need a Prenuptial Agreement?

In the United States, the divorce rate dropped significantly for the past 20 years. A survey from Statista shows a significant drop in the divorce rate from 4.2 in 1998 to 2.9 out of 1000 people in 2018.

While a prenup agreement is not mandatory, it would still be advisable to consult a lawyer in drafting one. If worse comes to worst, you may need to refer to the prenuptial agreement for the division of assets. If, in case it’s invalidated by the court of law, you’d have to go through a tedious divorce process and may pay for an even heftier sum compared to when you hire a lawyer to create the agreement for you. According to Thumbtack, a divorce would cost $15,000 on average while a typical prenup agreement would cost $2,500, not putting into account the hassle that the two parties would go through. There’s that much of a difference when it comes to legal fees. Prenuptial agreements avert possible crises if divorce happens. It would help the spouses avoid a possible outbreak of a fight. Drafting one is also essential when it comes to debt liability. If, throughout the marriage, the spouses loaned money from a financial institution, they would go after the both of you for debt settlement. With an agreement, you help clarify to the institution which spouse to go after or who is financially responsible between the two.

However, if you feel that a prenuptial agreement is more likely to cause damage to your relationship, then it would be better to hold off on that. After all, you still have a chance to write a postnuptial agreement.

What are Restrictions and Provisions of a Prenup?

Upon writing the agreement, you need to be truthful when declaring your assets. If the court finds out that there’s fraud involved, they would only invalidate your prenup. Some restrictions or limitations can be allowed. Some state laws may also already some of the issues you want to resolve in a prenuptial agreement. Therefore, there may be no need to draft one at all. It is also crucial that none of both parties have been coerced into agreeing with the agreement. It is still best to consult a lawyer to check if your situation requires a prenuptial agreement.

We create prenuptial agreements for the protection of our assets and property. As much as we’d like to include everything in the agreement, there are limitations regarding what you can and can’t include. FindLaw lists some of the things you can include in a prenup:

Conjugal property. Usually, the court defines which property is marital and which is separate upon divorce. The definition of marital property can vary by state. If you’d like to avoid having the court decide how to distribute your assets or property, it would be best to state that in a prenuptial agreement. Estate plans, family heirloom, distribution of property, provisions for children in previous relationships–try to specify as much as possible anything related to property and assets.Debt liability. No one wants to be held liable for someone else’s debt. If only one of the two spouses is indebted to a financial institution, it would be great to indicate that debt is a personal and not conjugal liability.Responsibilities of the Couple. A prenup does not only include distribution or division of assets. You can also include what financial tasks each can perform in case of divorce. For example, you can agree on who takes care of household expenses or credit card bills.Inheritance Rights of the Children. Children are not legally protected when it comes to inheritance. If your children are not in a will or a prenuptial agreement, they may not be able to receive anything. But if the court feels that the children were excluded by accident, the law will try to protect your children.Child Support/Custody. You can never include child custody agreements in a prenuptial agreement. It is up to the court to decide which parent is fit to get custody of the child.Personal Preferences. You should exclude provisions that lean more on personal rather than financial matters in the agreement. Since a prenup is initially made to settle any possible financial issue, personal preferences are out of the question. For example, you can never include that the other spouse has to maintain a certain weight while in a relationship. The court will frown upon such provisions, and they will not honor your agreement.Provisions that encourages divorce. We draft prenuptial agreements for two reasons: distribution of assets and protection of the wealthier spouse. If the court sees that the agreement was drafted unfairly in the sense that one of the two spouses will benefit more from a divorce, the court will set aside such provisions.Alimony waiver. Depending on the state, the court may strike down any provision on an alimony waiver. You may need to check with your state first if an alimony waiver can be allowed.

How to Draft a Prenuptial Agreement

Since there are things that you can and cannot include in a prenuptial agreement, you need to draft it carefully, as the court might only decide to strike it down. Like any good business contract, careful planning, right language, and aligning with state laws play a significant part in a prenuptial agreement. You can choose to consult a lawyer to write a prenuptial agreement for you. Additionally, you can take a look at our step-by-step guide on how to write a prenuptial agreement.

Step 1. Take a Prenuptial Questionnaire

There are some things that you need to consider, or your lawyer might need before drafting an agreement. Since it’s an agreement, there are many things that you need to specify to start developing one. For example, if you’re currently on a rental leasing agreement, upon marriage, will the contract change? Would you like to state who will be held responsible for household financial expenses? Which property/income would you want to consider separate and marital? Answering these questions will guide you on what provisions to include in the agreement. If you don’t know what questions to ask, you can refer to some prenup questionnaires available online.

Step 2. Disclose Your Financial Information

It is crucial to disclose the assets and income of both spouses with each other. Since it’s an agreement made to protect your assets and property, if there’s dishonesty, the court may decide to invalidate the agreement. Just like any other agreement, an alliance agreement, or a purchase agreement, if there’s no honesty involved, it will be nullified.

Step 3. Review Your State Laws

It may be essential to review your state laws first to make sure your prenuptial agreement is enforceable. Though most states follow the Uniform Prenuptial Agreement Act, some states don’t. For example, a prenuptial agreement is typically invalidated if it has been signed in urgency. Writing a prenup should take time and should be reviewed carefully by both spouses’ attorneys before the wedding. However, in Georgia, a prenup is still enforceable even if it was written two days before the wedding. For as long as both attorneys have had time to review it, Georgia’s state law will allow it. Witness requirements can also vary by state. For example, in Georgia, you are required to have two witnesses upon signing the agreement for it to be considered valid.

Step 4. Write Succinctly

Writing any legal document requires you to write it professionally. Make sure to check your legal terms, write in an active voice, and avoid confusing statements. Be careful in the language that you are using. Remember that one of the no-nos in a prenup is that it should not encourage divorce in any way. Whether intentional or unintentional, if the court feels that you are inviting a divorce, they will strike it down.

Step 5. Consult A Lawyer

A prenuptial agreement is a legal document. Unless notarized, it won’t be considered legally binding and may not be enforceable. Therefore, it would best to have a lawyer take a quick look at your document first before signing it.

Prenuptial agreements certainly aren’t romantic. If you have to go through so many details than necessary to get the deal done, then maybe you need to rethink marriage in the first place. While they are important to a relationship, if it’s something you have to brood about, then maybe it’s not the right relationship for you. However, for couples who have strongly bonded with each other, this would only be a small bump in their relationship. Therefore, stop thinking that prenuptial agreements are a death sentence. If anything, they will make your relationship grow and foster.