A prenuptial agreement or “prenup” is a concept many have heard of but not everyone understands. Movies and TV are partially to blame, for portraying prenups as being reserved for “gold diggers” or the super-rich.
In fact, in many instances, a prenuptial agreement is a useful tool to provide certainty and clarity to a couple planning to get married. Signing a prenup doesn’t mean you and your spouse are destined to get divorced. Rather, it indicates you understand the financial aspects of the partnership you are entering into, along with the personal side.
What Is a Prenuptial Agreement?
A prenuptial agreement is a contract signed by both spouses prior to getting married. It spells out who will get what in the event that the parties decide to get divorced.
During divorce proceedings, the parties must settle on a plan for dividing the couple’s property between the two divorcing spouses. If the parties can’t agree, the court will decide.
The issue of property division can often become very contentious. Spouses may fight over what is marital property (property acquired during marriage) and what is separate property (property brought into the marriage or property received by one spouse as a gift or inheritance).
The most heavily disputed issue often comes up when trying to divide the property fairly.
The court will make an equitable division of property based on several factors, which include:
- Each spouse’s economic circumstances
- Increases or decreases in each spouse’s separate property
- Each spouse’s contribution to the marital partnership
- The value of the property
These factors can become the subject of vicious disputes, in and out of court, during a divorce proceeding. However, the existence of a valid prenuptial agreement between the parties can save everyone the hassle.
Instead of arguing and fighting, the parties (and the judge) can simply look to the agreement for guidance with regard to property division. In some cases, a prenuptial agreement can also dictate who gets alimony.
Why Should We Get a Prenuptial Agreement?
The benefits of a prenuptial agreement stem from the fact that both spouses are on the same page regarding the financial outcome of a divorce.
Having a prenuptial agreement in place provides a level of certainty and may prevent resentment from growing over financial issues. Even if a divorce is never filed, the uncertainty of a court-ordered property division will never hang over the parties’ heads.
In the event a couple does get a divorce, their prenuptial agreement will obviate the need for lengthy court battles to determine asset division. This cuts down on legal fees for both sides, as well as reducing the stress and hostility of contentious divorce proceedings.
What Are the Requirements of a Prenuptial Agreement?
There are just a few requirements that a prenuptial agreement must meet in order to be useful in a divorce.
First, the agreement must be entered into voluntarily. This means it can’t be the result of undue pressure or duress on one of the parties. If there is evidence that one spouse was unfairly coerced into signing, the court will disregard the prenuptial agreement.
Additionally, a prenuptial agreement must be in writing. It is rarely a good idea to rely on a verbal contract, and in the case of a prenup, the court will not even consider it.
Finally, each party must make full disclosure of their finances and have the opportunity to consult with a lawyer before signing a prenuptial agreement. If one spouse did not provide a fair picture of their finances to the other, the agreement will not hold up, as it was not entered into by fully informed parties. Also, each spouse must at least have the chance to talk to an attorney before signing.
Steps to Getting a Solid Prenuptial Agreement
If you plan to have a prenuptial agreement signed before marriage, the most important thing is to make sure the above requirements are met. Both sides should make full financial disclosures and everything should be put in writing.
To make sure it holds up in court and does what it is supposed to do, a prenuptial agreement should also be:
- Fair and reasonable. If a prenup is very one-sided, the court will take a very close look at what’s going on. The court may even find it unconscionable and throw it out completely.
- Drafted by attorneys, such as the divorce attorneys at Colorado Legal Group. If both parties had lawyers who participated in drafting the prenuptial agreement, then there is no question that each spouse had the chance to get legal advice. Furthermore, if competent family law attorneys drafted the agreement it will be sure to meet all requirements and spell out the terms clearly for the parties and the court.
What You Can’t Put into a Prenuptial Agreement
A prenuptial agreement can be a very effective tool for settling the issues of property division and alimony. However, questions relating to children in a divorce cannot be decided by a prenup. This means a prenuptial agreement cannot dictate child custody or who pays child support and how much.