Prenuptial agreements must be drafted carefully and presented to the other party in the right way and in accordance with local state laws that place requirements and limitations on what they can effect.
Most Prenuptial Agreements are considered valid and enforceable (1) if they have been entered into freely without fraud, duress, coercion, or overreaching; (2) if there was full disclosure, or full knowledge and understanding of the nature, value and extent of the prospective spouse’s property; and (3) if the terms do not promote or encourage divorce or profiteering by divorce. A court may also consider a challenge to a Prenuptial Agreement if there have been relevant changes in circumstances that make enforcement of the agreement impossible or unconscionable.
Further, certain terms of a prenuptial agreement may be unenforceable if they clash with State laws limiting what a prenuptial agreement can effect. Depending on your state, prenuptial agreements may not be able to predetermine the allocation of parental rights and responsibilities, restrict child support, or penalize a party for adultery.
Premarital assets, gifts, inheritances, and passive growth on assets are all separate property by function of statute, with or without a prenuptial agreement. Protecting these assets in a prenuptial agreement is an extra layer of protection, but, if that is all the prenuptial agreement does, it likely is not going to change the result of your divorce.
A prenuptial agreement actually has a substantive effect when it defines what is going to happen to income earned during the marriage and what is going to happen to assets acquired during the marriage; specifically, when it changes the presumption that these items are presumed marital and are instead separate.
For example, without a prenuptial agreement, if a house is acquired during the marriage, it may be presumed marital property, subject to division, even if the house is only titled in one spouse’s name. A prenuptial agreement could say that anything acquired in one spouse’s name or deposited into a bank account in only one spouse’s name is separate property.
If you are thinking about divorce and are party to a prenuptial agreement, on either side, you should consult with one of our Divorce Attorneys. The document may do exactly what you think it does, or there may be significant exposure and enforceability issues.
