Pre-Nuptial Agreements
A pre-nuptial agreement is a private contract between the parties entered into prior to their marriage that outlines how assets and debts will be handled if the parties subsequently divorce. A simple pre-nuptial agreement often provides that each party retains their respective premarital property and any increase of value of premarital assets. It may also provide that anything they acquire in their individual name during the marriage would remain their separate property. Property acquired in joint names can be divided based on the applicable divorce laws or the parties can agree to split at a certain percentage, e.g. 50/50. A pre-nuptial agreement may also address spousal support. It is not uncommon for the amount of support to a spouse to increase based on the number of years married or number of children produced. Alternatively, one spouse may be required to pay support as a punishment if they commit adultery during the marriage.
As a contract, a pre-nuptial agreement must meet several requirements to be held valid. One, there must be a full and fair disclosure of the financial resources/existing assets by both parties. If there is not such a disclosure, there must be a provision in the agreement providing that the parties voluntarily and expressly waived the right to disclosure. Two, it must be clear that both parties voluntarily entered the agreement. For these reason, the agreement should be signed well before the wedding to avoid any challenge to the agreement that a party was forced to sign because the wedding date was fast approaching. Finally, steps should be taken to make sure the agreement is not invalidated on the basis of fraud, duress and/or misrepresentation. Any challenge under the above listed causes of action will require a fact-based analysis with the standard being a preponderance of the evidence, or more likely than not. Overall, it is difficult to overturn a pre-nuptial agreement once entered into, however, it can provide some peace of mind if the parties do not end up living happily ever after.
