A very personal agreement between two people who plan to be married, the prenuptial agreement, or “pre-nup” serves to protect the wealth of both partners. It presumes that the couple has already discussed their future marital arrangement, and that they have had the opportunity to examine one another’s finances in advance.
The prenuptial agreement has gained popularity as an added protection to prospective spouses. The presence of a pre-nup can pull a certain amount of weight in a court decision.
However, it is not a guaranteed legal device in court, especially with respect to divorce.
Signing off on the understanding that each person’s property belongs solely to him or her for the duration of the marriage is the document’s main thrust. It can prove helpful in avoiding nasty divorce settlements, as well as confusion when spouses and children clamor over a deceased’s spoils. A sound Last Will and Testament on file can also be helpful in interpreting the original intentions of the pre-nup. Keep in mind that oral or verbal prenuptial agreements are not recognized legally, so if there are potentially sticky issues in an upcoming marriage, a written agreement is advisable.
Key components of this document are the attached “Schedules” which set forth each party’s entire financial picture. These can be in the form of a professionally prepared financial statement, or just a list of accounts, properties, stocks and bonds, retirement funds and other assets and obligations. Obviously, full disclosure is important for an effective pre-nup.
A pre-nup is particularly important for people with considerable assets accumulated prior to marriage. It does not change the laws that equally divide assets acquired during the marriage, but protects individual assets acquired prior to the marriage.
Another caveat for this agreement is that it must be signed willingly by the parties. In the same vein, the agreement cannot be found to be “unconscionable,” or excessively unfair to either party. Anything that smacks of coercion or unscrupulous treatment of the other party can easily be thrown out by a judge, since the document’s validity carries only a limited amount of weight in a legal proceeding.
A lot can be said for having a pre-nup in place before marriage, however, there are just as many arguments against it, one of them being that asking your spouse to sign a contract agreeing not to touch your money doesn’t bode well for future trust issues in the marriage relationship.
Finally, it must be executed in such a way that it can be recorded by either a local county recorder’s office or whatever facility exists for that purpose in your area. Notarized signatures for a document like this are important -- as personal as the document is, it still needs to be signed before a notary public.