Prenuptial Agreements
A prenuptial agreement is a contract
made between two persons in contemplation
of marriage. The contract goes into effect
once the parties get married, but may
not require any action or have any legal
consequences until after they get divorced.
Prenuptial agreements are sometimes referred
to as “antenuptial” agreements.
Regardless of what they are called, their
purpose is to establish ground rules
for distribution of assets and payment
of support when and if, the parties subsequently
get divorced.
Prenuptial agreements are considered
a useful premarital planning device for
previously divorced parties endeavoring
to secure assets for their children of
a prior marriage. Particularly in cases
involving substantial premarital assets,
prenuptial contracts offer a decisive
mechanism for ascertaining and protecting
the assets subject to sharing and commingling
during the marriage.
Unfortunately, prenuptial agreements
are viewed with great skepticism by legal
scholars and lawyers. They are frequently
attacked in divorce proceedings. In some
cases, parties are forced to sign prenuptial
agreements without receiving a full disclosure
of the other party’s assets. Many
states now require that a full financial
disclosure be made in order to validate
a prenuptial agreement. Concealing assets
or failing to give a party a fair and
reasonable opportunity to examine the
assets, has often been cited as grounds
for invalidating an agreement.
Prenuptial agreements are also frequently
challenged on the grounds of fraud, duress,
and coercion. Thus, when a husband asks
his wife to sign a prenuptial agreement
only days before the marriage, it is
impossible for her to rationally consider
the possibility of canceling the wedding,
the catering hall, the band and contacting
more than one hundred guests to rescind
the invitations. In such circumstances,
a would-be wife might feel pressured
to sign a prenuptial agreement, a decision
she would later regret, and presumably
attack as having been a product of duress
or coercion.
Prenuptial agreements should never be
signed until a party first obtains independent
legal advice. A party should never consult
a attorney recommended by his or her
spouse, or paid for by the spouse. An
attorney is “independent” only
if the person hiring the attorney finds
the attorney on her own, pays for the
attorney on her own, and seeks independent
advice from that attorney.
Many states have adopted a law known
as the Uniform Premarital Agreement Act.
The UPAA defines prenuptial agreements,
requiring them to be in writing, signed
by both parties, and enforceable without
consideration. Parties are permitted
to enter into contracts setting forth
each of their rights and obligations,
including their right to buy, sell, use,
transfer, exchange, abandon, lease, consume,
expand, assign, create a security interest
in, mortgage, encumber, dispose of, or
otherwise manage and control property.
The prenuptial agreement may also modify
or eliminate spousal support or alimony.
It may refer to the making of a will,
a trust, or any other arrangement to
carry out the parties’ financial
wishes. It may also address the ownership
rights, and the disposition of death
benefits, from a life insurance policy.
A prenuptial agreement may indicate which
state law governs the agreement and this
may, in fact, become an important provision
if the parties move from one state to
another after the agreement is signed.
The UPAA includes a provision that prenuptial
agreements may not adversely affect the
right of a child to be supported. Generally,
a prenuptial agreement is not enforceable
under the Uniform Act if a party executed
the agreement involuntarily, or if the
agreement was unconscionable at the time
enforcement was sought.
Likewise, an
agreement may not be enforceable if the
party did not consult with independent
legal counsel or did not receive a full
and fair disclosure of the earnings,
property, and financial obligations of
the other party.
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