Family Law
FAQ
Premarital Agreements
What does a spouse give up by
signing a premarital agreement?
In signing an agreement, a spouse
agrees to have his or her property rights and support obligations determined by
the agreement rather than by the usual rules of law that a court would apply on
divorce or death. An agreement can give the spouse more or less than state law
allows. In most states, courts divide property as the court considers fair, and
the result is less predictable: The split could be fifty-fifty or something
else. If one spouse dies, courts normally follow the instructions of that
person's will, but in most states the surviving spouse is entitled to one-third
to one-half of the estate regardless of what the deceased spouse's will says. If
the husband and wife have signed a valid premarital agreement, that agreement
will supercede the usual laws for dividing property and income upon divorce or
death. In many cases, the less-wealthy spouse will receive less under the
premarital agreement than he or she would receive under the usual laws of
divorce or wills.
What does a spouse give up by
signing a premarital agreement?
In signing an agreement, a spouse
agrees to have his or her property rights and support obligations determined by
the agreement rather than by the usual rules of law that a court would apply on
divorce or death. An agreement can give the spouse more or less than state law
allows. In most states, courts divide property as the court considers fair, and
the result is less predictable: The split could be fifty-fifty or something
else. If one spouse dies, courts normally follow the instructions of that
person's will, but in most states the surviving spouse is entitled to one-third
to one-half of the estate regardless of what the deceased spouse's will says. If
the husband and wife have signed a valid premarital agreement, that agreement
will supercede the usual laws for dividing property and income upon divorce or
death. In many cases, the less-wealthy spouse will receive less under the
premarital agreement than he or she would receive under the usual laws of
divorce or wills.
Why would a spouse sign a premarital
agreement if he or she would receive less under the agreement than under other
laws?
The answer to that question depends on the individual. Some
people prefer to control their fiscal relationship rather than to leave it to
state regulation. They may want to avoid uncertainty about what a court might
decide if the marriage ends in divorce. For some, the answer may be "love
conquers all"--the less-wealthy person may just want to marry the other party
and not care much about the financial details. For others, the premarital
agreement may provide ample security, even if it is not as generous as a judge
might be. Still others may not like the agreement, but they are willing to take
their chances and hope the relationship and the financial arrangements work out
for the best.
What is necessary to make a valid premarital
agreement?
In general, the premarital agreement must be in writing and
signed by both parties. In most states, the parties must fully and clearly
disclose in writing their income and assets to each other. This way the parties
will know more about what they might be giving up. In some states, it may be
possible to waive a full disclosure of income and assets, but the waiver should
be done knowingly, and it is still best if each party has a general idea of the
other's net worth.
The premarital agreement must not be the result of fraud
or duress. An agreement is likely to be invalid on the basis of fraud if one
person (particularly the wealthier one) deliberately misstates his or her
financial condition. For example, if a man hides assets from his future wife so
that she will agree to a low level of support in case of divorce, a court
probably would declare the agreement invalid. Similarly, if one person exerts
excessive emotional pressure on the other to sign the agreement, a court might
declare the agreement to be invalid because of duress.
Must the
parties to a premarital agreement be represented by lawyers?
No, but it
is a good idea. Lawyers can help make sure that the agreement is drafted
properly and that both parties are making informed decisions. The lawyer for the
wealthier party usually prepares the initial draft of the agreement. The
less-wealthy party should also have a lawyer to review the agreement, even if
only on a minimal-cost consultation basis. Although you do not need to have a
lawyer in order to have a valid agreement, the agreement is more likely to be
enforceable if each person's interests are represented and significant
back-and-forth negotiations have taken place. The agreement is more likely to be
challenged if one of the parties does not have an independently chosen
lawyer.
Do premarital agreements need to provide for a certain amount
of support?
No, the law does not set a specific amount. In some cases,
though rare, a court may decide that an agreement is enforceable even if it
leaves one spouse with no property and no support from the other party. In
determining whether a premarital agreement is enforceable as drafted, courts
will examine circumstances that may have changed since the time of the
marriage--such as the birth of a child, a career given up, or an unforeseen
illness.
Some states will enforce an agreement to provide no spousal support,
so long as waiver of support does not leave the less-wealthy party so poor that
she or he is eligible for welfare. Many courts will apply broader notions of
fairness and require support at a level higher than subsistence. Some states
provide that the support cannot be "unconscionably" low. That is a somewhat
vague term that means different things to different courts.
Some lawyers
think it is a good idea for premarital agreements to contain an escalator clause
or a phase-in provision that will increase the amount of assets or support given
to the less-wealthy spouse based on the length of the marriage or an increase in
the wealthier party's assets or income after the agreement is
made.
May premarital agreements decide future issues of custody and
child support?
No. A court may consider a
premarital agreement the parties have reached regarding child custody or
support, but the court is not bound by it. Broadly speaking, parties cannot
bargain away rights of children, particularly before children are even born. A
later section in this chapter will discuss child support guidelines and
custody.
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