Pre-Nupital Agreements
A pre-nuptial agreement is defined as a marriage contract enteredintoprior to, and in contemplation of marriage. The purpose of a marriage contract is to facilitate free expression by the couple entering into the agreement to achieve certainty and predictability with respect to the many matters that arise from the marital relationship.
Who needs a pre-nup? Anyone who wishes to clearly work out the nitty-gritty financial details of how assets will be divided in the event of a divorce. Also, everyone loves to talk about dividing assets in a divorce; however, married couples also accumulate debt, which in absence of a pre-nup is also “equitably distributed” by the court. By specifying how assets, debts, future earning, retirement allocations will be divided in divorce, couples can take away some of the uncertainty that can cause additional stress in the marriage.
Even if you are entering the marriage with little assets; or there is little appreciable disparity of assets or income, that could soon change. A young couple embarking on their careers would benefit from a pre-nuptial agreement to ensure that whatever is accumulated during the marriage is not left up to a judge to decide how to divide.
Tristan Sanders and Silvia Sanders have been representing families transitioning through divorce for nearly 30 years. In that time, they have seen countless changes in the law relating to divorce, division of assets, parenting/time-sharing, etc. The law is always evolving and unpredictable. The unpredictability factor can sky-rocket depending many factors. The emotional turmoil experienced by parties going through a divorce cannot be underestimated. The old legal adage that criminal law attorneys see clients on their best behavior; whereas family law attorneys see clients at their worst, is not without some merit. A pre-nupentered into by a couple well in advance of marriage can shed light on expectations during the marital relationship and define the desired outcome in the event of a divorce. Another less thought about factor that increases the unpredictability is which judge is assigned to handle your divorce. Judges are randomly assigned to a case when the Petition for Dissolution is filed. That Judge may be a seasoned jurist in Family Law, or a newly appointed or elected jurist who is learning the ropes. In either case, someone other than you is being charged with evaluating the factors and circumstances in your divorce and entering an Order instructing you how your assets will be divided, how the couple will spend time with the children and many other ancillary issues such as child support, alimony, etc.
Talking about the “what ifs” with an experienced family law attorney can shed light on your relationship.
A consultation with an experienced matrimonial attorney to talk about the “what-ifs” can be extremely beneficial and shed light on your relationship. Today, many couples enter into marriage on relatively equal terms. Both parties are working, building careers, saving for retirement, maybe looking to buy a first home. Then children may come into the picture and you may decide that one spouse is going to scale back career ambitions to spend time at home and allow the other spouse to assume the financial responsibilities for the household. When going through this “what-if” question and answer session, an experienced attorney would bring up the discussion and applicability of Alimony/Spousal support in the event of a divorce. You may benefit from knowing your partner’s stance on any particular subject relevant to Divorce. If for example you learn that your future spouse would never want to pay alimony, it may convince you to keep working and find other suitable solutions to child-rearing.
You can create a marital agreement even post-marriage. The post nuptial agreement.
A marital agreement created after the marriage is unlike the pre-nup in that the “consideration” for enforcing the promises made to one another in the pre-nup is the anticipated marriage. The “marriage” actually makes that pre-nup enforceable.
While post-nuptial agreements can be more difficult to enforce, they are generally enforceable if a “bargained for exchange” is recited in the agreement. For example, a spouse could agree to a post-nuptial agreement in exchange for allowing the other spouse to acquire additional property or increase their debt. A post-nuptial agreement might make sense if a spouse wants to protect him or herself financially in the event a decision is contemplated to place a career on hold and stay at home with the children.
Essential Requirements in drafting a pre-nuptial agreement.
No two relationships are alike. For the pre-nuptial agreement to serve its intended purpose and hold up in court, if ever challenged, a lawyer must produce a tailor-made contract that accomplishes the following objectives:
- Anticipates future events such as birth, death, illness, remarriage, and changed financial circumstances;
- Properly labels and defines the types of payments provided;
- Limits the circumstances under which there may be modifications;
- Clearly provides for the transfer of property;
- Can withstand challenges at a later date.
A well drafted agreement incorporating these elements reduces the uncertainty and expense incident to dissolution of marriage, as well as limit or eliminate costly anticipated litigation.
Applicable legal guidelines and principles.
The courts will allow persons contemplating marriage to enter into a “bad” bargain as long as the legal consideration and disclosures are met. It is never advisable to sign a pre-nuptial agreement without having it first reviewed by and explained by an attorney of your choice, who is experienced in drafting pre-nuptial agreements. Remember you are entering into a contract which will presumably be scrutinized and enforced by the courts.
Likewise, a DIY “form” pre-nup can also prove disastrous. We have seen it time and time again. A spouse now served with a divorce petition pulls out his “kitchen table” Pre-Nuptial agreement signed by the parties prior to the marriage only to find out that the contract is invalid and unenforceable on one, or several grounds.The form, DIY, pre-nups are routinely tossed out due to various legal requirements that were not met.
Today courts generally favor enforcement of pre-nuptial agreements that provide full and frank disclosures, are devoid of coercion or duress and the parties had the opportunity to have the agreement reviewed by counsel of their choice.
AVOID PROBLEMS!
Don’t wait until the week prior to the wedding to discuss the pre-nuptial agreement with your lawyer and prospective spouse.Even if there is absolutely no indication of coercion or duress that could be inferred, the best advice is to haven the instrument prepared, reviewed and signed ideally six (6) months prior to the wedding date.
Your lawyer cannot represent both you and your future spouse in a pre-nup. Having the same lawyer advise you and your prospective spouse could create ethical conflicts which could invalidate the Agreement. Make sure that full financial disclosure is relayed and that your future spouse has had the opportunity to have the pre-nup reviewed and certified by an attorney of their choice.