A premarital or prenuptial agreement (also sometimes called a “prenup,” for short) is a contract between two people who plan to get married to each other. In the contract, the couple agrees to their obligations to each other and how their property will be handled in the event the marriage ends. This could be due to divorce or even the death of a spouse.
A premarital agreement is intended to last for the duration of the marriage, whether one year or fifty years. Prenuptial agreements typically don’t expire unless you both agree to such terms when you sign the contract.
Some couples choose to include a provision in the agreement known as a sunset clause, which sets a date for the contract to become void. For example, you may include a clause that states the agreement is valid for up to twenty-five years. In that case, if you stayed married for thirty years and then got divorced, your assets would be handled as though there was never a prenup.
People may choose to add a sunset clause to their prenup because they believe after being married for a certain amount of time, they’ll be able to decide how to handle their legal separation or divorce amicably. Or they may think that if they stay married for at least a certain number of years, they’re less likely to get divorced.
Throughout a marriage, many things can change – your financial situation included. What made sense when you signed your prenup might no longer be the best arrangement for you and your spouse. It’s possible to amend your prenuptial agreement as long as both parties agree to the changes.
In some cases, amending a prenup might be a better alternative to allowing the agreement to expire altogether. That’s because in cases with no prenuptial agreement, you and your spouse will be at the mercy of the state’s rules and the judge’s decision at the time.
A prenuptial agreement is a contract you and your soon-to-be spouse put into place before you get married. But that doesn’t mean you don’t have any options after you tie the knot.
Couples can still agree to terms and execute a contract after marriage. In that case, it’s called a postnuptial agreement since it happens after the nuptials. Aside from the name and the time when the agreement is signed, there’s not really any difference between a prenuptial and a postnuptial agreement.
Even with divorce rates at an all-time low, the estimated chance of a marriage ending in divorce is right around 40%. Second marriages are even more likely to end in divorce. Remember, all marriages eventually end, even if it’s due to death.
As such, any couple could benefit from a prenuptial agreement. Having a contract in place ahead of time ensures that both parties are treated fairly if the marriage ends. Still, there are some situations where you should strongly consider a prenup, such as:
- If either party has been married previously
- If either party has children (together or from a previous relationship)
- If you or your partner are small business owners
- If there’s a significant income or wealth disparity
- If you or your partner owns a significant amount of property
A prenup is a legal contract enforceable by the court as long as the agreement is valid. For example, both parties must be represented by their own legal counsel unless one or both parties waive that right. This is to ensure both parties are treated fairly and that no one is taking advantage of the other.
Also, both parties must be of sound mind and be able to read and understand the agreement fully. So, if one spouse doesn’t speak English, the agreement would need to be translated into a language they can read and understand.
Each person must turn over all financial information and records related to assets for the other party to review. Then, there’s a mandatory 7-day waiting period before the parties can sign the contract to ensure ample time for each person (and their attorney) to review the documents.
It’s important to note that the court may strike the contract if the parties don’t have equal bargaining power or if the agreement unfairly favors one party over the other.
Navigating the court system can be overwhelming. Whether you’re getting married or considering divorce, consulting with an experienced attorney is the best way to ensure you’re protecting yourself, your family, and your future.
Contact Bruce A. Mandel to discuss how a prenuptial agreement may benefit you and your future spouse. And don’t forget to follow Bruce on Facebook for more tips and advice related to family law matters.